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Congressional Democrats introduce public option legislation, prompting pushback from hospital groups

President Biden has signaled support for a public option, but industry groups are wary of the move.

Jeff Lagasse, Associate Editor

Photo: filadendron/Getty Images

Congressional Democrats have issued a request for information on a potential bill that would create a public option for health coverage, prompting pushback from hospital groups who have concerns about the move.

Representative Frank Pallone, D-N.J., and Senator Patty Murray, D-Wash., announced their plan on Wednesday, saying the goal of the proposed legislation is to lower healthcare costs and help families get access to affordable care. 

In a joint statement, Pallone and Murray echoed Democrats' longstanding assertion that healthcare is a right, a view decried by their Republican counterparts.

"No one should suffer or die because quality healthcare was too expensive or too hard to get," said Pallone and Murray. "We believe we must take bold steps to lower healthcare costs and move toward universal coverage by creating a federal public option available to everyone – and a clear majority of Americans agree.

"A federal public option will help guarantee that no matter where you live, who you are, or what your income. If you live in America, you can get the quality healthcare you need without worrying about cost."

Pallone and Murray sent an RFI letter to the public this week requesting its input as committee leaders begin to draft more comprehensive legislation. They requested responses by July 31.

WHAT'S THE IMPACT?

A public option would essentially create a government-run health insurance program that would compete alongside private insurance companies. 

This differs from Medicare for All, a proposal from some Democrats during the 2020 presidential election cycle that would have established a single-payer healthcare system in the U.S. similar to those found abroad. This would have effectively rendered the private health insurance industry obsolete and covered all Americans, regardless of age, race or other demographics.

A public option, by contrast, would not eliminate private insurance, but instead would stand alongside it as an option for Americans. It would look something like Medicare, the idea being that it would promote competition and lower prices among private insurers.

Former President Barack Obama was initially a strong advocate for a public option when crafting the Affordable Care Act, but GOP opposition forced Congress at the time to eliminate it from the law. President Joe Biden, Obama's former vice president, has said he supports a public option.

Pallone and Murray's proposed legislation received opposition from the American Hospital Association on Wednesday. AHA CEO Rick Pollack said that, while hospitals and health systems share the goal of achieving universal health coverage, they do so by supporting efforts to build on the current public-private system, in which many uninsured Americans are eligible for some form of subsidized coverage.

"We do not support the introduction of a public option plan that could increase the strain COVID-19 has placed on our healthcare system," said Pollack. "This type of proposal would strip significant resources from providers by relying on inadequate reimbursement rates, increasing the risk of hospital closures and threatening access to care for patients and communities."

The Federation of American Hospitals also spoke out, saying Congress should focus on making new ACA subsidies permanent, incentivize states to expand Medicaid and find ways to lower skyrocketing drug prices.

"Now is not the time for us to become embroiled in debates over issues like public option," the group said in a statement. "It would be a mistake to allow such distractions to stand in the way of enacting legislation that sets the pathway to all Americans having the health coverage and healthcare security that all of us deserve and should expect."

THE LARGER TREND

The public option re-entered public consciousness during the run-up to last year's presidential election, in which Biden said one of his administration's goals would be to add it to the framework established by the ACA.

"What I'm going to do is pass Obamacare with a public option, and [it will] become Bidencare," Biden said during a debate against former President Donald Trump in October.

"The public option is an option that says that if you in fact do not have the wherewithal, if you qualify for Medicaid, and you do not have the wherewithal in your state to get Medicaid, you automatically are enrolled, providing competition for insurance companies. That's what's going to happen."

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com