As Congress Prepares to Pass Budget with Funds for Health Care Reform, Sen. Brown Outlines Support in Senate for Public Plan Option

Brown Releases County-by-County Map of Ohio Showing Concentration of Uninsured Ohioans

WASHINGTON, D.C. – As Congress prepares to pass a budget that includes funding for health care reform, U.S. Sen. Sherrod Brown (D-OH) today outlined how reform with a public health insurance plan option could lower health costs, improve quality of care, and ensure access in rural and other underserved areas. Brown released a county-by-county map showing the concentration of uninsured Ohioans.

“Comprehensive health reform is not only a moral issue—it’s critical to getting our economy back on track,” Brown said. “We can’t achieve economic prosperity if families are only one hospital visit away from financial disaster or American businesses struggle to compete globally due to health care costs. We must preserve access to employer-sponsored health care while increasing competition in the private market. Unfortunately, HMOs and private insurers always seem to be one step ahead of the sheriff. Including a public health plan option will keep costs down while ensuring coverage is comprehensive and accessible.”
 
Health reform is expected to give Americans the choice between keeping their employer-sponsored health insurance or obtaining health coverage through a menu of competing plans. Brown today outlined the need for a public health insurance plan option to be included in this reform as a way of keeping HMO costs in-line and ensuring health insurance access in all parts of Ohio.

Also today, Brown led 15 of his Senate colleagues in sending a letter on the need for the public health insurance plan option to key congressional leaders. The senators emphasized that the inclusion of a public health plan option would bring much-needed competition to the private insurance market while containing costs, improving access, and setting a standard for efficiency, quality, and affordability. A full copy of the letter can be found here.

Currently, the United States relies on a private insurance system for most working-aged individuals and families. Under this system, more than 46 million Americans are uninsured, and an additional 25 million Americans are underinsured— living with health insurance that does not adequately protect them from catastrophic health care expenses. In Ohio, more than 1.2 million adults between the ages of 18 and 64—roughly 17 percent of that population—are uninsured. In Appalachian counties, the uninsurance rate hovers at nearly 22 percent. These numbers were calculated before the recession prompted many recent layoffs.

Brown outlined how the inclusion of a public health plan could improve access and affordability. Consumers Union found that 30 percent of the underinsured had out-of-pocket costs of $3,000 or more for a single year, and a Health Affairs study found that one quarter of underinsured people have deductibles of $1,000 or more. It is estimated that half of all personal bankruptcies are caused in part by unpaid medical bills or illness. A public plan option would set a standard for coverage and affordability—and would encourage private insurers to follow suit, by offering more services and limiting out-of-pocket costs like high deductibles and large co-payments.

Because a public health plan would have limited overhead and advertising costs, it would also set a new standard for efficiency and cost savings while bringing much-need competition to the health insurance market. According to a 2004 study, nearly two-thirds of privately-insured Ohioans get coverage through only three private insurance plans. In the private individual insurance market, more than 40 percent of claims are spent on administration, and in the small group market, that figure is nearly 30 percent. Medicare, the federal program providing health coverage to American seniors, spends only 5 percent on administrative costs. 

Additionally, a public health plan option would lower health care costs and improve the competitiveness of U.S. businesses. Since existing employer-sponsored health coverage depends on private health insurers, health costs are high and affect competitiveness. The average employer spent $7,173 per employee for health care in 2008 and paid an average of 20 percent of total medical premium costs for workers in 2008. Depending on how the public plan option is designed, savings could total between $750 billion to $2.23 trillion over eleven years. 

Finally, the inclusion of a public health plan option would ensure universal health coverage—by ensuring access in rural and underserved areas. Private managed care plans participating in the Medicare program (Medicare HMOs—now referred to collectively as the Medicare Advantage program) have demonstrated a tendency to terminating coverage in hard-to-serve areas. This practice, which spiked in 2000 and 2001 when Aetna U.S. Healthcare terminated coverage for 27,800 Ohioans and Prudential Health Care Plan of Northern Ohio cut services for 14,400 enrollees, is particularly troubling since the Government Accountability Office (GAO) has repeatedly found that Medicare HMOs are overpaid and thus cost taxpayers more than traditional Medicare.   By the middle of 2002, 50 Ohio counties had two or fewer Medicare HMO carriers and in 2003, there was only one carriers in five Ohio counties.  Without a public health insurance plan that is consistently available in all markets, many Ohioans are at risk of being stranded by capricious private insurers.

The largest withdrawals in Ohio included Aetna U.S. Healthcare, which terminated coverage of 27,800 Ohioans—30 percent of whom were living in rural, fringe, or small urban counties; Prudential Health Care Plan of Northern Ohio, affecting 14,400 enrollees; and Humana Health Plan of Ohio, Inc., which had 8,500 enrollees.  By January 1, 2001, more than 70,000 Ohioans were forced to find a new source of coverage due to termination of private plans.  An additional 23 private plans terminated coverage in 2002.

Brown, a member of the Senate Health, Education, Labor and Pensions (HELP) committee, is a leading voice in Congress on health care issues. In 2009, Brown helped pass the Children’s Health Insurance Program Reauthorization Act of 2009, which maintains or expands access to health insurance for 11 million children nationwide.  He introduced the Cancer Clinical Trials Act, which would prevent insurance companies from denying patients participating in clinical trials vital services they would otherwise receive under their health care plans. 
 
As part of the American Recovery and Reinvestment Act (ARRA), Brown helped secure $14 million in funding for Ohio’s community health centers. By introducing and advocating for the Coverage Continuity Act of 2009, Brown also fought successfully to ensure that the recovery package made health insurance more affordable for unemployed workers.  The final version of ARRA provided a 65 percent federal subsidy to help these workers afford temporary COBRA health coverage.

To view the comprehensive report, click here.

To see the data in a map, click here.

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