The Cost and Coverage Impacts of a Public Plan (Testimony before the House Ways and Means Committee)
April 2009
Lewin contact: John Sheils
The Cost and Coverage Impacts of a Public Plan
Testimony before the House Ways and Means Committee Hearing on Health Reform in the 21st Century: Employer Sponsored Insurance
Submitted by: John Sheils, Vice President, The Lewin Group
April 29, 2009
President Obama and Senator Baucus have proposed to create an “exchange” offering individuals and employers a selection of health plans. They also propose to create a new “public plan” that would compete for enrollment with private insurance plans in the exchange.
Premiums under the public plan would be up to 30 percent less than private insurance plans if Medicare payment levels are used. Due to this substantial cost advantage, we estimate that up to 119.1 million of the 171.6 million people who now have private employer or non-group coverage would move to the public plan (70 percent).