For decades, policymakers have been working to enact a national public health plan, which would allow Americans to buy insurance through a government program. Everyone loves the party game, “Two Truths and a Lie.” Can you guess which of the following statements about the public option for health coverage is not true?

A. In the U.S, approximately 40 percent of people already use a public health plan.
B. The public option would reimburse healthcare providers less than private insurance.
C. The public option represents a different direction for health reform from “single payer.”

Let’s examine each statement one at a time:

A. True. Medicare (61 million people) and Medicaid (83 million people) insure more than 40 percent of the American population, which is about 320 million people. 

B. True. Proposed public option plans (and existing public programs) pay providers less than private plans. This makes them less attractive to providers, and makes doctors less likely to accept new patients with public forms of insurance. Private insurance pays nearly twice (189 percent) as much money for inpatient services and even more than twice (264 percent) as much for outpatient services, on average, compared to Medicare; Medicaid on average pays 72 percent of what Medicare pays. The goal of lower reimbursement in the public option is to offer lower premiums to enrollees. However, when Washington became the first state to offer public plans on its exchange for 2020 coverage, the public plans cost up to 29 percent more than comparable private plans. 

Hospitals depend on higher reimbursement from private insurance companies to offset the lower rates paid by public plans. If more and more people use public forms of insurance, hospitals will be forced “to look at closing hospitals or mergers or reducing our services,” according to the Washington Hospital Association

C. Lie. The public option and single payer represent a similar direction for health reform. Some politicians, like Pete Buttigieg and Elizabeth Warren, have explicitly outlined two-step plans to first introduce a public option, then move to single payer. 

President Biden says he supports a “public option” but opposes single payer, or “Medicare for All.” So do 17 percent of Americans, according to polling from Kaiser. This position sounds moderate, but it’s really not feasible. You might just as well say you support getting off a rollercoaster halfway through the ride. When the public option runs private companies out of the market and ultimately becomes the only option, it’s no longer optional. The government then becomes the only payer, or the “single payer” for health care.

Read our policy focus on The Public Option for Health Coverage to learn more.