A week or so ago, I invited you to submit questions for Jacob Hacker, a (devastatingly handsome) political scientist at Berkeley, a prominent proponent of a public insurance option in health care, and one of the most important social policy intellectuals in the Democratic Party today. Below, he responds to five of your queries. In particular, I want to thank Jacob for taking them so seriously. I don't think I've seen a better or more detailed discussion of the pros and cons of a public insurance option anywhere. This will be worth referring to as the months wear on. The dialogue follows: The bolded bits are your questions. Everything else is Hacker's response. I've done no editing.1) Presumably a private plan would want to design its benefits so that the most expensive beneficiaries go to the public plan. Without subsidies or substantial restrictions on private plans, how do you account for adverse selection?The question raises one of the most serious concerns about having a public health insurance plan compete with private plans within an insurance pool—private plans will skim off the healthiest members of the pool, leaving the public plan with an “adverse selection” of risk. This is hardly an idle worry. Medicare has historically overpaid private plans that enroll the aged under the Medicare program in part because the private plans enroll healthier older Americans. But there are a number of ways to address this concern. Any one of them may be inadequate on its own, but taken together, I believe they can make the public health insurance plan a strong competitor with private plans, even if (as I expect) more vulnerable patients find the public health insurance plan more attractive than private plans.Let me start, however, by emphasizing what public plan choice is and why we need it. In many reform proposals, a new insurance pool would be created to offer group health plans to workers without access to good workplace coverage. Public plan choice simply means making a public health insurance plan modeled roughly after Medicare available to anyone enrolling through the pool—on the same terms under which other plans are available. As I argue at much more length in my recent brief, “The Case for Public Plan Choice in National Health Reform”, public plan choice is essential for three main reasons: JACOB HACKER RESPONDS...TO YOU!
A week or so ago, I invited you to submit questions for Jacob Hacker, a (devastatingly handsome) political scientist at Berkeley, a prominent proponent of a public insurance option in health care, and one of the most important social policy intellectuals in the Democratic Party today. Below, he responds to five of your queries. In particular, I want to thank Jacob for taking them so seriously. I don't think I've seen a better or more detailed discussion of the pros and cons of a public insurance option anywhere. This will be worth referring to as the months wear on. The dialogue follows: The bolded bits are your questions. Everything else is Hacker's response. I've done no editing.1) Presumably a private plan would want to design its benefits so that the most expensive beneficiaries go to the public plan. Without subsidies or substantial restrictions on private plans, how do you account for adverse selection?The question raises one of the most serious concerns about having a public health insurance plan compete with private plans within an insurance pool—private plans will skim off the healthiest members of the pool, leaving the public plan with an “adverse selection” of risk. This is hardly an idle worry. Medicare has historically overpaid private plans that enroll the aged under the Medicare program in part because the private plans enroll healthier older Americans. But there are a number of ways to address this concern. Any one of them may be inadequate on its own, but taken together, I believe they can make the public health insurance plan a strong competitor with private plans, even if (as I expect) more vulnerable patients find the public health insurance plan more attractive than private plans.Let me start, however, by emphasizing what public plan choice is and why we need it. In many reform proposals, a new insurance pool would be created to offer group health plans to workers without access to good workplace coverage. Public plan choice simply means making a public health insurance plan modeled roughly after Medicare available to anyone enrolling through the pool—on the same terms under which other plans are available. As I argue at much more length in my recent brief, “The Case for Public Plan Choice in National Health Reform”, public plan choice is essential for three main reasons: 
