The Senate’s Public Plan “Opt Out” – More Optics than Option for the States

Nina Owcharenko Schaefer / October 26, 2009

In the Senate, there is growing interest in the idea of a state “opt-out” of the federal public plan, a government –run health plan that would “compete” against private health plans. This latest Senate ploy creates the illusion of an “option” rather than making any fundamental changes to the controversial proposal. While it is difficult to understand its true impact until legislative language is available, taxpayers who will bear the cost burdens of a new government health care entitlement should keep a few points in mind:

1. States could only op-out of the public plan, not of the entire bill.
This is only an “opt-out” of one section of the massive health care proposal. There are literally hundreds of provisions that the states may find unacceptable, like the costly Medicaid expansion. That, for example, would add millions of new people onto the Medicaid rolls, and aggravate the “crowd out” of private health coverage and guarantee higher taxpayer burdens for one of the nation’s most poorly performing welfare programs.

2. A state opt-out does not eliminate the public plan.
(more…)