Public Health Insurance Plans: Dependence and Needs

Viable health care reform legislation should strengthen public programs that many rural people depend upon. The inclusion of a public health insurance plan in reform legislation would provide needed competition to private plans and address many of the health care challenges faced by rural Americans.
With a population that is older, poorer and with less employer-based health insurance coverage, nearly one-third more rural than urban people are covered by public health care programs such as SCHIP, Medicare and Medicaid. Rural, non-elderly individuals covered by public plans have increased by nearly 122 percent since 1987.

Some health care reform proposals would offer tax credits to help purchase private insurance and address health insurance cost and accessibility. However, research has shown that using tax credits to purchase private insurance is not cost effective. Estimates from a national model show tax credits cost between $2.36 and $12.98 per dollar of insurance provided. The cost of expanding public health programs ranges from $1.17 to $1.33 per dollar of insurance value provided.

Public insurance has pioneered payment and quality-improvement methods that both control costs and improve the quality of care. Medicare, for example, had about 60 percent less spending per enrollee than private insurance between 1997 and 2006.

The strengths of public health insurance plans are what many rural people and businesses need - stability and controlled costs while providing health insurance access to vulnerable populations like low and moderate-income families, small business employers and their employees, farmers, ranchers and other self-employed rural residents.

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