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Argument: Choosing between complicated private health insurance plans is difficult

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John Holahan and Linda Blumberg. "Is the Public Plan Option a Necessary Part of Health Reform?" Urban Institute: "Second, there is considerable variation in health insurance products sold, and consumers have great difficulty in making price and quality comparisons. This is especially true in the private nongroup insurance market, but is increasingly true in commercial group insurance as well. Covered services and costsharing requirements vary not only across insurance firms but across products sold within a single firm. In most nongroup insurance markets, the products a firm is willing to sell will even vary with the characteristics of the purchaser, with those with current or past health issues often offered plans with fewer covered benefits. Plans may vary considerably in provider networks as well. While reform would ideally prohibit insurers from offering less comprehensive products to individuals with worse health status, how much uniformity in benefit packages and cost-sharing will be required is unclear, and provider networks will certainly continue to vary across plans. Where there is variation, such as benefit limits and which services count toward out-of-pocket maximums, consumers may not understand the implications until they become ill. As a consequence, making comparisons across sellers is extremely difficult and may remain so.

[...] The products offered by sellers in insurance and hospital markets are complex and difficult to understand and evaluate. It is almost impossible to compare prices of either insurance products or services provided by hospitals and other health providers. The barriers to entry in both markets are great. Insurer consolidation means high levels of profitability. While much of the hospital sector is not-for-profit, lack of competition often means increased revenue devoted to the purchase and diffusion of new and expensive technologies and procedures."

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