[TheMercenary]

Congressional Budget Office analysis of the dramatically scaled-down public plan that Reid (D-Nev.) included in his $848 billion measure said it would have relatively little impact on the current system, would charge "somewhat higher" premiums than its private competitors and would draw only about 4 million subscribers.

The decision to permit states to opt out of the public plan is partly to blame for the Reid proposal's lack of reach, as it would leave about a third of the people in the country without access to the program, according to the CBO's calculation. But even the national plan approved by the House this month would attract only about 6 million people, the nonpartisan group has said, primarily because it would lack the tools to keep costs and premiums down.

"This is an example of a weak version of the public option, and it raises the question: Why are we doing this at all?" said John Holahan, director of the Health Policy Research Center at the liberal Urban Institute. "If your goal is cost-containment and lower government subsidy costs, this isn't working, and the CBO is telling them that."

But he added that ***he would "probably" offer an amendment to strengthen the public plan by requiring it to pay hospitals and other providers based on Medicare rates, which are typically much lower than those paid by private insurers.***

Health policy experts said that would give the public plan a big competitive advantage over the version proposed by Reid and approved by the House. Both of those provisions would require federal health officials to negotiate rates directly with providers, a system that would leave the government generally paying the same rates paid by private insurers, the CBO said.

The public plan would probably charge higher premiums, however, because federal health officials would be unlikely to employ the sort of hard-nosed tactics private firms use to keep costs down, such as denying certain medical procedures, according to the CBO analysis. That would attract sicker people to the public plan, forcing it to charge higher premiums.

http://www.washingtonpost.com/wp-dyn...111902631.html

So if premiums are going to be HIGHER than the private sector how the hell is that a deal for the taxpayers? So the public option is not less expensive it is more expensive.