Gov't plan can coexist with private insurance

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Jul 27th, 2009 | WASHINGTON -- A new government health insurance plan sought by President Barack Obama and congressional Democrats could coexist with private insurers without driving them out of business, an analysis by nonpartisan budget experts suggests.

The estimate by the nonpartisan Congressional Budget Office -- seen as good news by Democrats -- comes as leaders pushed Monday to make progress on health care overhaul before lawmakers go home for their August recess. . . .

Democrats are using the budget office's suggestion that a government-run insurance plan would not destroy private insurers to rebut one of the main charges against their proposal -- that it would lead to a federal takeover of the private health insurance marketplace. . . .

Polls have shown that Americans support the idea of a public coverage option as part of health care overhaul. . . .

More than 160 million workers and family members now get health insurance through an employer. A widely cited study by the Lewin Group, a private health research firm [owned by a health insurance company], estimated that more than 100 million people would sign up for the public plan proposed by House Democrats, making it the dominant insurer in the land.

But the budget office, in a letter Sunday to a senior Republican lawmaker, said its own estimate for the same legislation is "substantially smaller."

CBO estimates that only 11 million to 12 million people would sign up for the public plan -- making it a much smaller player in the market. The government coverage would be available alongside private plans through a new kind of insurance purchasing pool called an exchange. CBO estimated about 6 million of those enrolled in the public plan would be workers and family members of employers that joined the exchange. . . .

From Wikipedia:

During 2009, [the Lewin Group's] research was widely cited by opponents of U.S. healthcare reform as being independent.^[11]