A Public Option for Employer Health Plans

49 Pages Posted: 23 Feb 2021 Last revised: 11 Jun 2021

See all articles by Allison K. Hoffman

Allison K. Hoffman

University of Pennsylvania Carey Law School

Howell E. Jackson

Harvard Law School

Amy Monahan

University of Minnesota Law School

Date Written: February 17, 2021


Following the 2020 presidential election, health care reform discussions have centered on two competing proposals: Medicare for All and an individual public option (“Medicare for all who want it”). Interestingly, these two proposals take starkly different approaches to employer-provided health coverage, long the bedrock of the U.S. health care system and the stumbling block to many prior reform efforts. Medicare for All abolishes employer-provided coverage, while an individual public option leaves it untouched.

This Article proposes a novel solution that finds a middle ground between these two extremes: an employer public option. In contrast to the more familiar public option proposal, which would offer government sponsored health insurance directly to individuals, our plan creates a public option for employers, who can select a public plan—based on Medicare and altered to meet the needs of working populations—instead of a private health plan for their employees. Employer-based private health coverage is in decline and increasingly leaves workers vulnerable. Our proposal offers a gradual way to loosen reliance on this system.

We review the policy, regulatory, fiscal, and business arguments in favor of this form of public option, which we argue is less disruptive than Medicare for All but more impactful than an individual public option. Because employer take up would be gradual and voluntary, our plan has lower fiscal costs and should face less resistance from employees and vested interests than Medicare for All. Over time, if the plan meets employers’ and employees’ needs, more people would be covered by a public option, moving away from over-reliance on private employer plans and toward something akin to Medicare-for-Many in a less politically, legally, and fiscally fraught way.

Keywords: health reform, employer-provided health insurance, public option, Medicare for All

JEL Classification: I13, I18, K32

Suggested Citation

Hoffman, Allison K. and Jackson, Howell Edmunds and Monahan, Amy, A Public Option for Employer Health Plans (February 17, 2021). U of Penn Law School, Public Law Research Paper No. 21-12, Harvard Public Law Working Paper No. 21-19, Available at SSRN: https://ssrn.com/abstract=3787675 or http://dx.doi.org/10.2139/ssrn.3787675

Allison K. Hoffman

University of Pennsylvania Carey Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

HOME PAGE: https://www.law.upenn.edu/cf/faculty/ahoffma1/

Howell Edmunds Jackson

Harvard Law School ( email )

Griswald 402
1563 Massachusetts Avenue
Cambridge, MA 02138
United States
617-495-5466 (Phone)
617-495-5156 (Fax)

Amy Monahan (Contact Author)

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

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