This report analyzed alternative public plan options for the under-65 population and presented estimates of the impacts on health spending compared with projected trends.

From the report:

National health reform efforts are seeking to expand insurance coverage, improve quality of care, and "bend the health care cost curve." At the center of the debate is whether a new public health insurance option should be offered to the under-65 population, and how this public plan should be structured. Commonwealth Fund researchers presented three alternative approaches to health reform—two that include a public plan option and one that relies on private plans only—and provided estimates of the potential impact each would have on health care spending.

1. Public Plan with Medicare Payment Rates. This option includes a public health insurance plan that would pay health care providers at Medicare rates and would be offered alongside private plans within a national health insurance exchange. The public plan and private plans would all be subject to the same insurance rules.
2. Public Plan with Intermediate Payment Rates. This option also includes a public health insurance plan, but providers would be paid at rates set midway between current Medicare rates and private plan rates. It would be offered alongside private plans within a national health insurance exchange and subject to the same market rules.
3. Private Plans. No public plan would be offered under this option; employers and individuals would choose from private plans offered through a national health insurance exchange.

Full report: Alternative Paths to a High Performance U.S. Health System (PDF | 293.4 KB)

The Commonwealth Fund. (2009). Alternative paths to a high performance U.S. health system: impact of three approaches on health care spending. Mika, S. & Nuzum, R.