Budget Office: Public Option Would Cost More than Private Plans - Political Hotsheet - CBS News

(AP)

The government-run health insurance plan, or "public option," crafted by House Democrats would typically have higher premiums than comparable private insurance plans, according to a new budget estimate. Yet even though the public plan is weaker than liberals initially hoped -- thereby making it more expensive -- House Speaker Nancy Pelosi said in an interview with Politico Thursday that she does not want liberals to attempt to make it more "robust."

The analysis (PDF) submitted yesterday by the nonpartisan Congressional Budget Office bucks the liberal argument that a public plan would be cheaper for consumers than private insurance. While its administrative costs would be lower, the CBO reported, other factors would offset that.

A significant factor for the higher premiums would be the fact that House Democrats included in the legislation unveiled Thursday a public option that would negotiate its payment rates with medical providers. Liberals like Pelosi were inclined to include a public option that tied its payment rates to Medicare -- this would have made it cheaper, but moderate Democrats from rural areas complained that doctors and medical providers in their regions would not be paid enough.

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