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Tom Perriello | Fifth District Report

As I continue visiting every locality in the Fifth District this August to hear my constituents’ feedback about healthcare reform, one of the most common questions I receive is about the public option, the Health Insurance Exchange, and whether or not it all means a “government takeover of healthcare.” I’d like to explain the intended role of these programs. 

The reform legislation proposes to create a Health Insurance Exchange in which individuals and businesses can compairson shop for health insurance plans. Think of it as a grocery store where you can look at all the plans on the shelf and decide which one is best for you. The goal of the Exchange is two-fold: first, to provide more options for health care consumers and second, to reduce health care costs by encouraging more competition on price and quality. Participation in the Exchange is completely optional; no business or individual is required to enter.

Our current healthcare system is not truly market-based. If you are an individual or business seeking to purchase health insurance, your options can be very limited depending on where you live, what pre-existing conditions you may have, and of course, what you can afford. The Exchange would create a real market-based system that would allow plans to compete with each other and bring down costs overall.

The Exchange will primarily be intended for individuals who have lost employer-covered health insurance. To help those individuals, new affordability credits will be available to assist those with incomes up to 400 percent of the federal poverty level ($43,000 for individuals or $88,000 for families of four) and phase-out on a sliding scale basis. Plans competing in the Exchange will be required to provide a standard set of benefits and must have a cap on premiums and out-of-pocket spending. This means that whoever buys insurance through the Exchange will be protected, so no one will face bankruptcy due to medical expenses.

Another “customer” of the Health Insurance Exchange will be small employers (those with 10 or fewer employees in the first year, and 20 or fewer in the second year) and extended to larger employers over time. Small employers who choose to purchase group plans through the Exchange would be able to eliminate the administrative costs of maintaining their own health plan contracts. From what I hear from small businesses around our district, this kind of assistance would help them become more competitive.

Many folks also have questions about the public option. The public option would be a plan run by the government, like Medicare, that would compete with the private plans in the Exchange. The purpose of including the public option is to increase competition, thus driving down healthcare costs overall. (This is comparable to the way UPS and FedEx currently compete with the U.S. Postal Service.) Another proposal on the table is to create a non-profit cooperative – similar to electricity cooperatives that we have in our rural areas – to increase competition in the sector.

I still have questions about these proposals and whether or not they will really provide long-term cost savings. But one thing is clear: none of these proposals constitutes a “government takeover” of healthcare. Any plan to earn my support must preserve patient choice and bring down healthcare costs.

The entire bill, along with fact sheets and analyses, is posted on my online healthcare forum: where your comments are welcome.

Please feel free to contact me to share your concerns and ideas. You may call 888.4.TOM4US (888.486.6487); write to 1520 Longworth House Office Building, Washington, D.C. 20515; or visit to sign up for my weekly e-newsletter.


Tom Perriello represents the Fifth District in the United States House of Representatives.

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