The purpose behind the public option was to make more affordable health insurance for uninsured citizens who are either unable to afford the rates of or are rejected by private health insurers. Supporters argued that a government insurance company could successfully lower its rates by using greater leverage than private industry when negotiating with hospitals and doctors, as well as paying the employees of the public option insurance company salaries as opposed to paying based on individual medical procedures.
Supporters of a public plan, such as "Washington Post "columnist "E. J. Dionne, argue that many places in the United States have "monopolies in which one company, or a small set of companies, control the local market for health insurance. "Economist and "New York Times columnist "Paul Krugman also wrote that local insurance monopolies exist in many of the smaller states, accusing those who oppose the idea of a public insurance plan as defenders of local monopolies. He also argued that traditional ideas of beneficial "market competition do not apply to the insurance industry given that insurers mainly compete by risk selection, claiming that "[t]he most successful companies are those that do the best job of denying coverage to those who need it most."
Economist and former "US Secretary of Labor "Robert Reich argued that only a "big, national, public option" can force insurance companies to cooperate, share information, and reduce costs while accusing insurance and pharmaceutical companies of leading the campaign against the public option.
Many Democratic politicians were publicly in favor of the public option for a variety of reasons. President Obama continued campaigning for the public option during the debate. In a public rally in "Cincinnati on September 7, 2009, President Obama said: "I continue to believe that a public option within the basket of insurance choices would help improve quality and bring down costs." The President also addressed a Joint Session of Congress on September 9, 2009, reiterating his call for a public insurance option, saying that he had "no interest in putting insurance companies out of business" while saying that the public option would "have to be self-sufficient" and succeed by reducing overhead costs and profit motives. Democratic Representative "Sheila Jackson-Lee, who represents the "18th congressional district in "Houston, believed that a "vigorous public option" would be included in the final bill and would "benefit the state of Texas."
The final bill, the "Patient Protection and Affordable Care Act, included provisions to open health insurance exchanges in each state by October 1, 2013. As the Act requires Americans to purchase health insurance, the federal government will offer subsidies to Americans with income levels up to four times the federal poverty level.
An alternative proposal is to subsidize private, non-profit "health insurance cooperatives to get them to become large and established enough to possibly provide cost savings Democratic politicians such as "Howard Dean were critical of abandoning a public option in favor of co-ops, raising questions about the ability of the cooperatives to compete with existing private insurers. Paul Krugman also questioned the ability of cooperatives to compete.
While politically difficult, some politicians and observers have argued for a "single-payer system. A bill, the "United States National Health Care Act, was first proposed by Representative "John Conyers in 2003 and has been perennially proposed since, including during the debate on the public option and the Patient Protection and Affordable Care Act. President Obama has come out against a single-payer reform at this time, stating in the joint session of Congress that "it makes more sense to build on what works and fix what doesn't, rather than try to build an entirely new system from scratch." Obama had previously expressed that he is a proponent of a single payer "universal health care program during an AFL-CIO conference in 2003.
A number of alternatives to the public option were proposed in the Senate. Instead of creating a network of statewide public plans, Senator "Olympia Snowe proposed a "trigger" in which a plan would be put into place at some point in the future in states that do not have more than a certain number of private insurance competitors. Senator "Tom Carper has proposed an "opt-in" system in which state governments choose for themselves whether or not to institute a public plan. Senator "Chuck Schumer has proposed an "opt-out" system in which state governments would initially be part of the network but could choose to avoid offering a public plan.
In January 2013, Representative "Jan Schakowsky and 44 other "U.S. House of Representatives Democrats introduced H.R. 261, the "Public Option Deficit Reduction Act," which would amend the 2010 "Affordable Care Act to create a public option. The bill would set up a government-run health insurance plan with premiums 5% to 7% percent lower than private insurance, with the "Congressional Budget Office estimating a reduction in the "United States public debt by $104 billion over 10 years.
Both before and after passage in the House, significant controversy surrounded the "Stupak–Pitts Amendment, added to the bill to prohibit coverage of abortions – with limited exceptions – in the public option or in any of the "health insurance exchange's private plans sold to customers receiving federal subsidies. In mid-November, it was reported that 40 House Democrats would not support a final bill containing the Amendment's provisions. The Amendment was abandoned after a deal was struck between Representative "Bart Stupak and his voting bloc would vote for the bill as written in exchange for the signing of "Executive Order 13535.
Republican House Minority Whip "Eric Cantor has argued that a public plan would compete unfairly with private insurers and drive many of them out of business.
"Michael F. Cannon, a senior fellow of the libertarian "CATO Institute, has argued that the federal government can hide "inefficiencies in its administration and draw away consumers from private insurance even if the government offers an inferior product. A study by the "Congressional Budget Office found that profits accounted for only about 4 or 5 percent of private health insurance premiums, and Cannon argued that the lack of a "profit motive reduces incentives to eliminate wasteful administrative costs.
Dr. Robert E. Moffit of the "Heritage Foundation has argued that a public plan in competition in private plans would likely be used as a "dumping ground" for families and individuals with higher than average health risks. This, in his view, would lead to costs that business should pay being passed onto the taxpayer.
"Marcia Angell, M. D., Senior Lecturer in the Department of Social Medicine at "Harvard Medical School and former Editor-in-Chief of the "New England Journal of Medicine, believes that the result of a public option would be more "under-55's" opting to pay the fine rather than purchase insurance under a public option scenario, instead advocating lowering the Medicare age to 55.
The chief executive of "Aetna, "Ron Williams, argued against the public option based on issues of fairness. On the "News Hour with Jim Lehrer, Williams noted that a public option creates a situation where "you have in essence a player in the industry who is a participant in the market, but also is a regulator and a referee in the game". He said, "we think that those two roles really don't work well."
Public polling consistently showed majority support for a public option. A July 2009 survey by the "Quinnipiac University Polling Institute found that 28% of Americans would like to purchase a public plan while 53% would prefer to have a private plan. It also stated that 69% would support its creation in the first place. "Survey USA estimated that the majority of Americans (77%) feel that it is either "Quite Important" or "Extremely Important" to "give people a choice of both a public plan administered by the federal government and a private plan for their health insurance" in August 2009. A "Rasmussen Reports poll taken on August 17–18 stated that 57% of Americans did not support the current health care bill being considered by Congress that did not include a public option, a change from their findings in July 2009. A "NBC News/"Wall Street Journal poll, conducted August 15–17, found that 47% of Americans opposed the idea of a public option and 43% expressed support. A "Pew Research Center report published on October 8, 2009 stated that 55% of Americans favor a government health insurance plan to compete with private plans. The results were very similar to their polling from July, which found 52% support. An October 2009 Washington Post/ABC poll showed 57% support, a "USA Today/"Gallup survey described by a "USA Today article on October 27 found that 50% of Americans supported a government plan proposal, and a poll from November 10 and 11 by Angus Reid Public Opinion found that 52% of Americans supported a public plan. On October 27, journalist "Ray Suarez of "The News Hour with Jim Lehrer noted that "public opinion researchers say the tide has been shifting over the last several weeks, and now is not spectacularly, but solidly in favor of a public option."
Between October 28 and November 13, 2009, Democratic Senator "Dick Durbin's campaign organization polled Americans to rank their support for various forms of the "public option" currently under consideration by Congress for inclusion in the final health care reform bill. The 83,954 respondents assigned rankings of 0 to 10. A full national option had the most support, with an 8.56 average, while no public option was least favored, with a 1.10 average.
A survey designed and conducted by Drs. Salomeh Keyhani and Alex Federman of "Mount Sinai School of Medicine done over the summer of 2009 found that 73% of doctors supported a public option. A survey reported by the "New England Journal of Medicine in September, based on a random sample of 6,000 physicians from the "American Medical Association, stated that "it seems clear that the majority of U.S. physicians support using both public and private insurance options to expand coverage."
Conversely, an "IBD/TIPP poll of 1,376 physicians showed that 45% of doctors "would consider leaving or taking early retirement" if Congress passes the health care plan wanted by the White House and Democrats. This poll also found that 65% of physicians oppose the White House and Democratic version of health reform. Statistician and polling expert "Nate Silver has criticized that IBD/TIPP poll for what he calls its unusual methodology and bias and for the fact that it was incomplete when published as responses were still coming in.