Rather than set up a separate government run medical insurance or expansion of medicare to the general public….One criticism of government care is that it will be in direct competition with existing providers. Ultimately siphoning insurance customers away from traditional plans and onto the rolls of govt care causing these providers to go out of business.

Here in my state the auto insurance companies MUST offer the same basic minimum coverage in order to do business in the state. Everyone here must have at least the same basic level of insurance (both auto and medical) . You can go to any provider you choose and this basic minimum insurance level costs the same . If you want more insurance you can pay for additional coverage. But that basic plan is available to all.

So why not have a similar program for medical insurance as part of a nation wide group policy. This group can be subsidized by the government but it would be managed by the existing insurance providers. (In other words if you want to be in the insurance business you must offer and support this minimum plan which would be a foundation for any other plan you offer) The govt pays the insurance company a flat rate to manage each person enrolled in the basic plan.
The more money the company saves (the better they manage the insurance) the more money they keep. However if that company provides poor management it will cost them. Either subscribers will change management companies if they feel they are getting a raw deal or wasteful management would not be payed for by the government.

One advantage I see here is that consumers would have an alternative providers to go to if they feel wronged by a particular management company. Insurance providers also have an incentive to offer additional services to the basic plan members in order to attract more subscribers and earn money.

With a govt program like medicare your stuck with the one provider (the governement).

As they say One Choice is NO Choice….

If someone wants additional insurance they can buy additional coverage from any provider they choose. But No one could be denied coverage for the standardized basic plan. Since everyone is part of this national group policy the basic insurance is portable and independent of supplemental policy one may have. So if you change jobs or move to a different state you may loose the supplemental policy BUT your basic coverage remains intact. You merely transfer the company that provides the management services for the basic medical.

Insurance providers would get paid by the fed to manage the participants in the basic plan for each participant in the basic plan. this would put market forces into play for the insurance providers to make money by attracting additional participants through better service or offerings. COunter to this is if the consumer gets crappy management services they can transfer to any other insurance provider.