Reminder: Americans Can’t Afford The Public Option

WASHINGTON – Today, more than ever, it is important Americans have access to affordable, high-quality health coverage and care.  As health care remains a top priority to voters, it’s important to keep in mind the unaffordable costs of new government-controlled health insurance systems like the public option.

A study by Tom Church, Daniel L. Heil, and Lanhee J. Chen, Ph.D. of the Hoover Institution finds that the public option “could require tax increases on most Americans, including middle-income families.”  In fact, according to study author Lanhee Chen, “To pay for a politically realistic public option, policymakers could impose a new 4.8 percent payroll tax, which would eventually cost the average American worker about $2,300 per year in higher taxes.”

The study finds, “a politically realistic public option would add over $700 billion to 10-year deficits.  By 2049, the plan would increase long-run debt projections by 30 percent of GDP or require tax increases equal to nearly 20 percent of projected income tax revenue.  These tax increases may affect even middle-income taxpayers, raising their marginal income tax rates by several percentage points.”  This would make the public option “the third largest line item on the federal budget, behind only Medicare and Social Security.”

• The public option “could require tax increases on most Americans, including middle-income families” and could “add over $700 billion to the 10-year federal deficit, with dramatically larger losses in subsequent years.” (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)
• A politically realistic public option could lead to a new 4.8 percent payroll tax on American families, which would eventually cost the average American worker about $2,300 per year in higher taxes – far higher than the combined Medicare payroll tax Americans pay today. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20; “Usual Weekly Earnings Of Wage And Salary Workers,” Bureau Of Labor Statistics, U.S. Department Of Labor, Accessed 2/3/20)
• Over 30 years, the public option would become the third most expensive government program behind only Medicare and Social Security – both of which are at risk for the seniors who rely on them. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)
• While proponents try to claim the public option could reduce costs by reimbursing providers at Medicare rates, recent history at both the federal and state levels demonstrates that putting politicians in charge of a new government-controlled health insurance system could lead to higher costs and tax burdens for American families. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)

Economists agree that the public option would burden American families with unaffordable costs. 

• The public option “could also lead to a 10 percent increase in premiums for the remaining pool of insured people.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)
• “[A] government buy-in that attracted older Americans could indeed raise premiums for those who remained in the A.C.A. markets, especially if those consumers had high medical costs.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)
• “[A] government plan that attracted people with expensive conditions could prove costly.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)

As Chris Pope, a senior fellow at the Manhattan Institute sums up in National Review, “[t]he more a public option is able to achieve the increases in coverage and benefit generosity promised by single-payer, the more it is likely to yield the associated disadvantages of tax increases or cutbacks in access to quality medical services.”

Meanwhile, Polling Shows The Majority Of Americans Are Unwilling To Pay More For Health Care And Support Building On What’s Working in Health Care:

• The third edition of Voter Vitals – a tracking poll conducted nationwide and in 2020 battleground states by Locust Street Group for the Partnership for America’s Health Care Future – finds that “72% of voters are unwilling to pay any more for health care and 66% are unwilling to pay any more in taxes for universal coverage,” and a majority of Americans do not support one-size-fits-all government-controlled health insurance while a supermajority of Americans (66 percent) prefer to build on our current health system rather than replace it with something new (34 percent).  
• “Americans continue to prefer a healthcare system based on private insurance (54%) over a government-run healthcare system (42%),” according to Gallup’s annual Health and Healthcare poll, which finds that a government-controlled health insurance system “remains the minority view in the U.S.  This could create a challenge in a general election campaign for a Democratic presidential nominee advocating a ‘Medicare for All’ or other healthcare plan that would greatly expand the government’s role in the healthcare system.”
• And a recent survey by the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research, finds that Americans “are still more likely to prefer the private sector than the government on driving innovation in health care, improving quality and … providing coverage,” The Associated Press reports.
• Additionally, Gallup finds that the vast majority of Americans with private coverage rate their health care coverage (71 percent) and quality (79 percent) as ‘excellent,’ or ‘good.’