Public health insurance vs. private health insurance: Pros and cons
Federal health care reform is billed as a way to guarantee you, your family, your neighbors, your co-workers and all Americans have a choice of affordable health insurance.
By requiring insurers to offer coverage to more people and growing government programs, the federal health care reform law seeks to expand health care coverage for Americans — nearly 50 million of whom are uninsured. By 2014, most Americans will be required to buy health insurance or must pay a tax penalty for not doing so.
Most Americans don’t have a multitude of choices right now, especially between a selection of affordable private health plans and government-funded health coverage.
“Most people don’t have that choice. We think you ought to have more options,” says Michael Freeman, executive vice president of the Healthcare Leadership Council, a coalition of chief executives of the nation’s leading health care companies and organizations.
If you’re a senior adult still in the workforce, you do have a choice between private health insurance — through an employer — and government-backed Medicare. Within Medicare, private options are available.
The other main government insurance program, Medicaid, assists the country’s poorest people. These people, even if they are employed, aren’t likely to be able to afford insurance offered through their employers. One component of health care reform will make Medicaid available to more low-income families, those earning up to 1.33 times the poverty level.
But if given a choice between private health insurance and government health insurance, which should people pick? Researchers and health policy officials drew on their knowledge and studies about Medicare — the government’s most popular program — and private insurance in offering their opinions.
Executive vice president
Healthcare Leadership Council, a coalition of chief executives of health care companies and organizations
Why private insurance: “Private insurance in general is the preferable option in that private companies adjust more to changes in medicine and can adapt more quickly to new medical innovations. Private plans are looking for ways to provide better care at less cost. It took 40 years (for Medicare) to cover prescription drugs. If you look at the history of Medicare and Medicaid, it’s like a big ocean liner trying to turn around. With a private plan, you don’t need an act of Congress to change what you’re going to cover.”
Outlook: “Looking forward into the future, as Medicare and Medicaid continue to have lower payment rates than private insurance, it becomes a real question whether a sufficient number of doctors are taking Medicare and Medicaid patients. You have access problems.”
Spokesman for America’s Health Insurance Plans, a trade association for the health insurance industry
Why private insurance: “If you look at the Medicare program, every senior does have the choice between the private Medicare Advantage plan and the fee-for-service part of Medicare (where health care providers are paid for each office visit, test, procedure or other service). Seniors are increasingly choosing to enroll in the private plan. It has grown steadily: One in four seniors are enrolled because of the benefits and service and higher quality those plans provide. Private Medicare Advantage plans are … helping coordinate care for beneficiaries with chronic medical conditions. They are enrolled in disease management programs.”
Outlook: “Evidence shows those programs work to improve care for patients and lower health care costs. Our research has done a tremendous amount of work looking at hospital readmissions. We have a readmission crisis in this country. Patients who are discharged from the hospital are not getting appropriate follow-up. In a fee-for-service system, there isn’t an incentive for hospitals and doctors to take steps to prevent that from happening. If patient goes back to the hospital, they get paid again. What private plans have done is they’ve implemented programs … to make sure patients get appropriate follow-up care to avoid unnecessary, costly trips to ER. Readmission rates in the Medicare Advantage program are 20 to 30 percent lower than the Medicaid fee-for-service program.”
Senior researcher at The Commonwealth Fund, a private foundation that conducts research on health care issues
Why government insurance: “Medicare is doing a good job on the two main purposes of health insurance: access to care and financial protection from medical bills when they do get care. Medicare beneficiaries are reporting better access to care, better financial protection, fewer negative experiences and overall they’re more satisfied with their insurance (according to 2012 research by The Commonwealth Fund). It appears Medicare is doing a better job. Those folks who do have Medicare, relative to working adults who have private coverage, are reporting fewer negative experiences, less billing problems, and are less likely to accrue medical debt and have whole host of financial problems because of medical care. They’re more satisfied overall with health insurance.
“Generally, employer-sponsored coverage isn’t rated as highly as Medicare coverage. When you think about it, why would people be less satisfied with it? Costs (for employer coverage) are going up and up and up. Costs are going up for Medicare, too, but it’s been particularly tough on those with employer coverage.”
Outlook: “A number of things (related to health care reform) are trying to change the system and make it more efficient. There are some new ways to pay doctors. In the Medicare program, the health reform bill is gradually closing the donut hole (a gap in Medicare coverage for prescriptions). Lots of beneficiaries have access to free preventive visits.”
Dr. Benjamin Sommers
Assistant professor of health policy and economics, Harvard School of Public Health
Why government insurance: “When states (he studied Arizona, Maine and New York) expanded Medicaid to all low-income adults … that broader expansion reduced mortality. It improved health and saved lives (an estimated 6 percent decline in the adult death rate). We also looked at other measures and found people had better access to care. They were less likely to put off getting care. They were more likely to stay in very good or excellent health. There are a lot of people out there who suggest that any kind of health care involving the government must be bad. I think that’s very misleading. The vast majority of people with Medicare are positive about it.”
Outlook: “A part of what our findings are suggesting is that in some ways these government programs are very effective for health and health insurance. (The study) looked at how often they had to put off seeing doctor because they couldn’t afford it. After states expanded Medicaid (using guidelines from the new health care law), fewer people had to put off care. Particularly for low-income adults, they had a much easier time getting care they needed. Reducing those cost barriers (kept them from) waiting until they have an emergency.”