What exactly is the Public Option?

As I travel the country and ask the question, it is apparent that America has no clear definition of the Public Option policy. It is clear there are still many questions on this Public Option policy. Let’s begin by understanding what does public option mean? Public Option is understood to have the government “own” an insurance company to offer a competitive product in healthcare to compete with the private insurance companies. This option is in a National insurance exchange or a spectrum of policies, so the consumer can choose and pick the policy in order to acquire affordable healthcare. So the consumer has all the insurance choices, federal employee plans, private plans, and the new Public Option plan.

So is this new government insurance policy truly going to lower the cost of healthcare? Many Americans believe it will. By offering the Public Option, the private insurance company will be forced to lower their rate, or leave the business; this is the consensus of many Americans. Many believe the only solution is a single payer system eliminating the insurance industry completely. So they support this Public Option.

What is not known is the following:
1. What those savings will be?
2. What policy design will be offered?
3. Will the current system of distribution, where everything goes thru the insurance companies, really make a difference now that a government insurance plan is available?
4. Where does all the 634 billion dollars go too? Is it all premiums to the insurance companies?

These are the questions we should consider, and I will attempt to objectively answer.
1. The savings projected by lowering administration fee is estimated at 20%, but that is arbitrary and uncertain.
2. The design is in providing a comprehensive major medical plan. Although the administration may be reduced, the cost will continue to rise. Senator Baucus himself projects premium in 2013 to be $6800 for single person and $17,000 for a family before taxing corporations. There are no projected changes occurring in existing catastrophic plans, where the maximum is $10,000. Why?
3. Since the current system will continue as before with the addition of the government Public Option plan with the same inefficiency, fraud, and ineffectiveness, inevitably the result will be No Change.
4. The dollars allocated for reform will be paid to the insurance industry, and increased fees to the providers thru the insurance industry resulting in a windfall, leaving the American consumer frustrated, under insured, and paying more premiums and taxes in the long run.

The unanswered question is the problem. If we are to believe a government plan is truly the answer, then we should demand AIG to provide the plans, since the government owns AIG. Is this not the proposed Public Option to have a government owned insurance company? What about a public option where the current system is not necessary and provides a true option to the public? We should have a public option where communities can participate and offer access to the 47 Million uninsured, a system where the providers and consumers work together without everything going thru the insurance companies.

AIG or a government plan should offer a stop-loss catastrophic policies with a low premium and very high deductibles for all American interested in covering all major illnesses after the high deductibles at 100% to cover their back.
The community public option with the stop-loss catastrophic policy is viable solution for the uninsured, and indeed would offer the public an option.