O.K., this analysis is from America’s Health Insurance Plans, which is very much opposed to a public health plan that pays providers at Medicare rates. But if I had to pick one concern I have with the public plan (which I support) it would be the potential impact on providers and the unintended fallout thereof. Notes AHIP:
If half of patients with private coverage moved to a government-run plan that paid Medicare FFS rates, many California hospitals would be forced to operate at a net loss – even if the current losses incurred by hospitals for uncompensated care were eliminated. Some hospitals would face a loss of as much as nine percent.
If all patients moved to a government-run plan that paid Medicare FFS rates and still assuming uncompensated care costs were eliminated, virtually every hospital in California would be forced to operate at a net loss, with some hospitals facing losses of as much as 34 percent….
Even if a government-run plan paid providers at Medicare FFS rates plus 10 percent, California hospitals would still face significant losses.
Of course, “if” is a big word, and there is much dispute surrounding exactly how many people would migrate to a public plan and what the impact would be. But again, the potential disruption to providers should be a real concern for both proponents and opponents of the public plan concept.
Note: AHIP’s analysis is based on data from California’s Office of Statewide Health Planning and Development.
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