This article examines the potential effects of a public plan option on hospitals and private insurers given a variety of assumptions.  The authors conclude that high enrollment of uninsured adults in the public plan would benefit hospitals.  Though the public plan reimbursement rates would be lower than those from private insurance, the hospitals would see an influx of new patients.  However, the authors note that effect would be reversed if many privately insured individuals enter the public plan, lowering hospital revenues because of lower reimbursement rates without the corresponding increase in patients.  In addition, the authors highlight that a major shift from private to public plans will likely increase private insurance premiums as companies attempt to cover cost.

Dobson, A., DaVanzon, J.E., El-Gamil, A.M., & Berger, G. (2009). How a new 'public plan' could affect hospitals' finances and private insurance premiums. Health Affairs, 28(6): w1013-w1024. DOI: 10.1377/hlthaff.28.6.w1013. http://content.healthaffairs.org/cgi/content/short/hlthaff.28.6.w1013

Authors: Allen Dobson, Joan E. DaVanzo, Audrey M. El-Gamil, Gregory Berger