By NextBestFitPublic option alongside private insurance
Anyone can buy into a public plan (Medicare-like) at a subsidized premium; employer and private plans continue. Uninsured people can be auto-enrolled.
Conflicts with single payer; universal only with auto-enrollment.
Review ledgerHow this path connects
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Create a public plan sold on every ACA marketplace and open to employers
- Set its provider rates (e.g., Medicare plus a percentage) and require Medicare-participating providers to accept it
- Fund start-up reserves and risk adjustment with private plans
- Auto-enroll the uninsured into the zero-premium version
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
- Tens of millions of people have no coverage
A subsidized public plan gives uninsured people another coverage option while employer and private plans continue. This gradual approach lets people keep plans they like, tests public-plan competition, and requires a smaller initial tax increase.
- Job lock: people stay in jobs to keep insurance
A public plan available to anyone offers coverage outside employer insurance.
- Transition disruption: jobs, companies, and familiar coverage
Keeping employer and private plans lets people retain coverage they like during a gradual expansion.
- Replacing premiums with taxes
Keeping existing coverage alongside a public option limits the initial tax increase.
- About $1 trillion a year in administrative cost
Keeping many payers limits administrative savings.
- Depends on other changes to work
Universal coverage through the public option depends on automatic enrollment.
- Concentrates costly patients in some plans
The public plan may attract sicker people, making its coverage more costly.
- Two-tier care: a private fast lane for those who can pay
Public coverage alongside private insurance can preserve faster elective access for people buying private coverage, as in the cited Australian example.
3 paths soften this
Ban duplicate private insuranceTwo-tier care: a private fast lane for those who can payRejectedAllow supplemental only (non-covered items)Two-tier care: a private fast lane for those who can payChosenStrict opt-out rules for cash-only practiceProviders leave, retire, or go cash-only if pay dropsChosen
Who's affected
- Uninsured people
- Tens of millions of people have no coverage: They delay care, go without, or pay full price.
- People whose job, income, or home changes
- Job lock: people stay in jobs to keep insurance: Would-be founders, early retirees, and caregivers stay in jobs to keep insurance.
- People with employer coverage
- Transition disruption: jobs, companies, and familiar coverage: People leave plans most of them rate well, and must re-learn how coverage works.
- About $1 trillion a year in administrative cost: Premiums pay for the administration.
- Insurance and billing workers
- Transition disruption: jobs, companies, and familiar coverage: Jobs selling coverage and processing claims end.
- Health insurers, brokers, and their shareholders
- Transition disruption: jobs, companies, and familiar coverage: Insurers lose their core business, and shareholders lose value.
- High earners
- Replacing premiums with taxes: They pay more under income-based taxes than they did in flat premiums.
- Two-tier care: a private fast lane for those who can pay: Paying privately buys faster care.
- Employers
- Replacing premiums with taxes: Businesses that never offered coverage start paying toward it.
- Doctors, nurses, and other clinicians
- About $1 trillion a year in administrative cost: Time goes to billing and insurer rules instead of patients.
- Taxpayers and public budgets
- About $1 trillion a year in administrative cost: Public programs pay for it too.
- Cash-pay and private care practices
- Two-tier care: a private fast lane for those who can pay: They earn revenue from the private fast lane.
- Employers
- Tens of millions of people have no coverage: Employers that don't offer coverage avoid its cost.
- Job lock: people stay in jobs to keep insurance: Benefits help employers keep workers who would otherwise leave.
- Taxpayers and public budgets
- Tens of millions of people have no coverage: Public budgets avoid subsidy costs in the short run.
- Health insurers, brokers, and their shareholders
- Job lock: people stay in jobs to keep insurance: Insurers and brokers sell group coverage through employers.
- About $1 trillion a year in administrative cost: Insurers, billing firms, and clearinghouses earn from the complexity.
- Low- and middle-income households
- Replacing premiums with taxes: Income-based taxes replace flat premiums that took a large share of their pay.
- Insurance and billing workers
- About $1 trillion a year in administrative cost: Their jobs exist because of the complexity.
- People relying on publicly funded care
- Two-tier care: a private fast lane for those who can pay: Private fast lanes draw provider time away from public care.
- Risk adjustment between public and private plans
Where it has been tried
- Washington State: In January 2025, about 94,000 marketplace customers selected Cascade Select public option plans, up 50% from 2024.
- Australia: Medicare covers everyone; about half also buy private insurance for faster elective care.