Debate continues to rage in Washington over whether or not a public health insurance option should be included in the final version of the bill designed to both stop the skyrocketing price of health care in America, while simultaneously insuring an additional 45 million Americans. President Obama claims that a public health insurance option is necessary to add competition to the health insurance market and lower insurance premiums. Critics say the last thing American taxpayers need is another huge, high-cost public program. But despite the heated debate over the “public option”, in essence federal and state governments already run publicly funded health insurance programs: they are called Medicare and Medicaid.

Medicare

Medicare is a publicly funded health insurance program that covers Americans aged 65 and older. There are also some younger people with severe and degenerative diseases who also qualify for Medicare. Like regular (private) health insurance, this public health insurance plan covers the majority of an individual’s health expenses, but not all of them. Medicare also does not cover home care and nursing home care. There has been much discussion over the “donut hole” in Medicare drug benefits, in which many Medicare recipients find themselves paying hundreds or even thousands of dollars for medications, which for one reason or another are not covered by Medicare.

Medicaid

Medicaid is designed to cover America’s poorest citizens who would otherwise not be able to afford a private insurance plan. Medicaid currently covers approximately 36 million individuals; eligibility standards are determined primarily on a state-to-state basis, as Medicaid is jointly funded between the federal and state governments. Medicaid also includes SCHIP, or the State Children’s Health Insurance Program, designed to cover the neediest of children.

Given the current costs associated with Medicare and Medicaid (and these costs are rising quickly, especially as aging baby boomers become eligible for Medicare), it is no wonder that many lawmakers are reluctant to add yet another publicly funded health insurance program. However, given that over 45 million Americans make too much money to qualify for Medicaid, but too little money to afford insurance, it is also no wonder that other lawmakers are pushing to add a “public option”. The latest congressional compromise, brokered by Senate Majority Leader Harry Reid, will make a public option available, but give states the option to opt-out of the program.

Will this satisfy both the critics of big government and proponents of public health insurance? We can only wait and see.