A new report by the Institute for America's Future (IAF) finds regulation of the private health insurance industry alone will not be sufficient in helping to provide affordable coverage for all Americans.
The report comes weeks before Congress will resume an intense bipartisan battle on health reform that questions the feasibility of the current U.S. healthcare system.
"The fact that Medicare consistently polls more popular with seniors than private insurance polls with working people should tell us something about why we need a public plan for everybody," said Timothy Jost, author of the study. "The private insurance industry has created a system by which people are not covered, are undercovered, or lack financial security, and reform is absolutely necessary."
"But, even if we outlaw explicit risk selection, private plans will still find ways to cherry pick," Jost said.
Rep. Pete Stark (D-Calif.), chair of House Ways and Means Health Subcommittee and Rep. Xavier Becerra (D-Calif.) said the new report shows how the public plan option, considered by Democratic versions of reform, "remains a crucial lynchpin for the success of health reform."
Stark said a successful health reform bill won't pass the House without a strong public health insurance option. "It's probably the most important part in getting any savings," he said. "It's the only the way to accomplish successful reform without imposing draconian regulations on insurance companies. We need a new competitor in the race."
Stark said he opposes the proposal by Republicans and some Democrats to replace the public health insurance option with health insurance cooperatives. He said the cooperatives were the insurance equivalent of unicorns. "They may sound good, but they have no real-world viability."
Becerra said the public plan will "keep the insurers accountable and honest. It's not enough to bring everyone in and keep prices down without a public health insurance option."