Privatized Public Health Insurance and the Goals of Progressive Health Reform

Abstract

What does a single-payer system or a public option look like in a country where more than one-third of Medicare beneficiaries and more than two-thirds of Medicaid beneficiaries are enrolled in privatized public health coverage? The first state to implement a public option plan directed government officials to contract with private health insurers, rather than opening up access to traditional public benefits. For the fall 2020 open enrollment period, Washington’s health insurance exchange featured fifteen plans touted as public options, offered by five private carriers. Colorado’s governor proposed a similar plan, pursuant to 2019 legislation directing state officials to create a public option, but legislation to implement it was paused in 2020 due to the coronavirus pandemic. These developments raise important questions: Is it necessary to eliminate private insurance companies to serve the goals of progressive health reform? What makes public health insurance programs public? Does privatized public health coverage have enough advantages over highly regulated privately financed insurance to be worth the trouble?

This Article explores the role of privatized public health coverage in progressive efforts to expand public health care financing and administration. It is highly unlikely that any argument will persuade die-hard progressive reformers that they should prefer to rely on private administration to any degree. Nonetheless, it is helpful to understand that privatization is not inherently incompatible with the ethos of solidarity (interdependence among individuals and groups), mutual aid (reciprocity of support), and communitarianism (connectedness between individuals and their communities) that animates progressive reform proposals. State and federal lawmakers could use statutory provisions, regulations, and contract terms to secure the public’s interest in universal coverage, fair distribution of the health benefits and financial burdens of public investments in health care, and public deliberation on plan design. By these normative criteria, which are derived from prior work developing a health justice model for health reform, privatized public health insurance may be nearly as public as our current Medicare and Medicaid programs.

This Article’s descriptive contribution furthers its normative argument. By laying out the questions legislatures and executive officials must answer in terms that are accessible to public-minded participants in civil society debates, it demonstrates how health reform proposals should be vetted through discourse that makes trade-offs explicit and fosters collective problem-solving in response to collective problems.

Keywords: health insurance, privatization, health care, health reform, public option