A public health insurance option (public insurance option or public option for short) is a proposed health insurance plan that would be offered by the U.S. federal government. It is present in America's Affordable Health Choices Act of 2009 (H.R. 3200) as a Qualified Health Benefit Plan. President Barack Obama promoted the idea while running for election.

Since becoming President, Obama has downplayed the need for a public health insurance option including calling it a "sliver" of health care reform, but has still not given up pursuing one. Congressional Democrats have tended to support this idea, stating that it would drive down premiums and provide choice where few options exist. Congressional Republicans have tended to oppose the idea, stating that it would cause the private health insurance industry to collapse.

Since the Qualified Health Benefit Plan would initially keep rates for services between Medicare and most private insurers, private insurers have complained that this will result in cost-shifting to them. Supporters of a public plan, such as Washington Post columnist E.J. Dionne, argue that many places in the United States have monopolies in which one company, or a small set of companies, control the local market for health insurance. A government run plan would thus create new competition.

Dionne has labeled a public option a "monopoly-buster." Economist and New York Times columnist Paul Krugman has stated that traditional ideas of beneficial market competition do not apply to the insurance industry given that insurers must engage in risk pooling. Krugman has written, "the most successful companies are those that do the best job of denying coverage to those who need it most." In a public rally at Cincinnati in September 7, 2009, President Barack Obama said, "I continue to believe that a public option within the basket of insurance choices would help improve quality and bring down costs."

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