To keep premiums “affordable” it will run at a perpetual loss. Once it is accepted that premiums do not need to cover costs, there is no obvious limit to how low premiums could be set, and lowering premiums will become a perpetual campaign theme. In short order, the public “option” will use its loss-making ability to lower premiums enough to price private-sector health insurers – even not-for-profit organizations that have to break even – out of the market. At that point, the public option won’t be an “option” at all – it will be the only health plan available.
The Public Option Isn’t Really An ‘Option’: Robert Brook, September 30, 2016, Forbes