The Public Health Care Plan Will Cost More Because It Will Attract Sicker Patients

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The Washington Post told readers that: "according to the Congressional Budget Office, a government plan as outlined in both the Senate and House bills would cost more than private coverage and, as a result, attract few customers." It would have been helpful to point out that the reason CBO projects that the plan will have higher costs is that it will attract less healthy patients. The reason is that CBO assumed that private insurers would find ways to effectively cherry pick their patients (in violation of the law) so that their patient pool will be healthier than the population as a whole. Less healthy patients would opt into the public plan because they would get better treatment. While the CBO analysis shows that the public plan would have higher costs because its patients are sicker, because it projects that the public plan will be more efficient than private plans, it would still lower costs for the health care system as a whole.

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