How Healthcare Reform Affects You

Separating fact from fiction

What is the difference between a public option and a co-op plan?

A public option would be a government-run program, similar to Medicare or the Veterans healthcare system. To create a public option, Medicaid would be expanded to all individuals with incomes up to 133% (House) or 150% (Senate) of the federal poverty level. Like private insurers, the government would negotiate rates with providers. Supporters say a public option would force private insurers to be more competitive. Critics say this would put them out of business, making way for a government takeover of the entire insurance industry. They also argue that lower administrative costs and the ability to negotiate more favorable rates with physicians and other providers would give the government an unfair advantage.

A popular alternative to a public insurance option is the nonprofit health insurance cooperative, which could be formed at the national, state, or local level. A cooperative, like a credit union, is member-owned by the patients it insures and they negotiate rates. The appeal to supporters is that it’s not a government run program. Details must still be worked out, but the conventional wisdom is that the government would fund the start up of co-ops and then turn them over to their members.

Another idea being considered is a public option trigger. Private insurers would be given a series of benchmarks they must meet by a specific deadline. If they don’t, the government would be free to create a public insurance program. Senate Democrats and conservative House Blue Dog Democrats like the idea.

Under a new healthcare plan, would employers, including small businesses, be required to cover their workers?

A plan requiring businesses to provide insurance benefits for their employees will likely be included. That could mean that companies with more than 25 employees (or possibly 50) would have to provide insurance for their workers or pay a penalty. Smaller businesses would be exempted. A House bill would exempt firms with a payroll of less than $250,000 a year.

Will people lose their current coverage?

No. People will still have the choices they have today, and the government will work to expand the choice of doctors and plans for everyone.  Medicare would remain a critical part of any reformed system, according to the Center for American Progress think tank.

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