CBO: Public option premiums higher than private plans - Live Pulse - POLITICO.comThe public insurance option would typically charge higher premiums than private plans available in the exchange, according to the Congressional Budget Office analysis of the House bill.
That surprising conclusion raises doubts about Democratic promises that a government-run insurance plan would provide a lower-cost alternative to consumers.
That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that “adverse selection” on the public plan’s premiums would be only partially offset by the “risk adjustment” procedures that would apply to all plans operating in the exchanges.)
There's a much-needed dose of reality. If you peruse any of the articles at places like dailykos, there are hundreds of comments saying things like "insurance is so expensive nowadays, I need a public option so I can afford to get coverage!"