In short, it means that the private sector will be paying more; it is that simple. Look at it this way, even now under Medicare the payments are well below the private sector and even below the cost for some services. The White House has announced new deals with the pharmacy industry and with hospitals to cut their costs to the federal government. One has to ask how does that save money or free up money to add new entitlements. The math is simple, if the money reduces the federal expense there is more federal money to spend and the unintended consequences (and I use the term loosely) is that costs go up for everyone else. Think of it as a stealth tax on everyone who has health insurance in the US. To help pay for expanded coverage for some Americans all other Americans with health insurance will pay even more if further cuts are made to the payments made by Medicare. Most, but not all of this burden will be on employers making their ability to remain competitive that much more difficult in this economy. Think of it as a big shell game, the federal government moves money around and around and as long as it comes off the federal books, it is ok.
Now, let us take this one-step further and assume there is no private sector and the public option becomes the only option. There is no place to shift costs. If the federal program keeps managing its costs simply by not paying providers what it takes to provide quality health care then what happens? Or, if in the interest of meeting budget constraints public option medical costs have to be cut, then what happens? Play out this scenario a few years and the answer become the same as it is in every other country that has such a program. Health care providers make considerably less, services are limited, waits are longer for some non-urgent care, routine care is not a priority and those who can afford it buy supplemental coverage to obtain the services they were used to and expect.
If this is the health care system America wants, so be it. However, it would be nice to have our politicians tell us where we are truly going.