Argument: Public and private insurers can learn from each other

Issue Report: Public health insurance option


Jacob Hacker. “The case for public plan”. The Institute for America’s Future: “public and private plans can learn from each other as they exploit their strengths and remedy their weaknesses. Expanded coverage of prescription drugs by Medicare HMOs, for example, demonstrated the feasibility of drug coverage for the elderly and helped to increase political pressure for drug coverage for all people with Medicare. The development of performance measures for Medicare private plans provided a template for projects testing comparable measures under the public Medicare plan. Similarly, innovations in coordinating care for elders with chronic illness in private plans have provided a useful foundation for care-coordination demonstrations in the public Medicare plan.

Meanwhile, private insurers have emulated Medicare’s prospective payment system for hospitals, physicians and nursing homes, and many of the early techniques of utilization review were first developed by Medicare and later diffused to private insurers. Recently, Aetna, WellPoint, and other larger insurers have moved to ban payments for care that results in serious errors—following the lead of Medicare’s effort to stop paying the cost of treating bed sores, falls, and other preventable injuries and infections. And no one doubts that Medicare has provided an important fallback for elderly and disabled Americans who have substantial health needs or whose private plans exit the market or switch benefits or providers.”