New CBO Analysis: Public Option Will Actually Increase Enrollment in Private Insurers

A new report from the Congressional Budget office "found that a health care reform bill that includes a public option sought by Democrats would result in 3 million more people enrolled in employer-sponsored coverage by 2016, compared with what would happen under current laws." From Reuters:

Democrats in the U.S. House of Representatives pounced on a congressional budget report to promote their plan for a government-run health insurance option on Monday, as party leaders said they were closer to agreement on healthcare reform.

The analysis by the nonpartisan Congressional Budget Office said a government-run health insurance plan proposed by Democrats would not drive private insurers out of business, and most people would still choose to get their medical coverage through their employers...

The CBO report estimated only about 10 million to 11 million people would sign up for the public option by 2019, far fewer than the 83 million cited in another analysis by the Lewin Group. The Lewin Group is part of Ingenix, a wholly-owned subsidiary of UnitedHealth Group (UNH.N).

The CBO report also estimated that about 12 million people who otherwise would not be enrolled in employer-based plans would fall under the Democratic proposal because the mandate for individuals to be insured would increase workers' demands for employer-based insurance. 

Republicans often cite Lewin Group analysis to make their point that millions of people would lose their current health coverage if the proposed overhaul became law. But the CBO disputed the Lewin Group conclusions.

Opponents of the public option have been more than happy to point to CBO cost estimates about different health care proposals. Will they suddenly find the CBO to be untrustworthy when it undercuts one of their key augments against a public option?

The letter from CBO Director Douglas W. Elmendorf to the House Ways and Means Committee is here.