ICYMI: Study Reveals The Public Option Could Cost The Average American Family More Than $2,500 Per Year In New Taxes

WASHINGTON – In case you missed it, a recently released study finds that a proposed new government-controlled health insurance system called the public option could add $100 billion more to federal deficits than previously estimated.  The study warns the public option “would likely require broad-based tax increases,” or could “increase deficits by almost $800 billion over ten years.”

The study, by Lanhee J. Chen, Ph.D., Tom Church, and Daniel L. Heil of the Hoover Institution for the Partnership for America’s Health Care Future, finds the average American family could eventually see their payroll taxes increase by more than $2,500 a year – a $200 increase from a January estimate.  Alternatively, another way to finance the public option could increase personal income tax rates by 18 percent across the board, pushing the top marginal tax rate to over 50 percent. 

Key Findings:

• During this critical time, financing a politically realistic public option would be more expensive than initially calculated.  The average American family could eventually see their payroll taxes increase by more than $2,500 a year – a $200 increase from a January study – in addition to costs of coverage and care.
• Alternatively, another way to finance the public option could increase personal income tax rates by 18 percent across the board, pushing the top marginal tax rate to over 50 percent.
• Further, under a different scenario, politicians could finance the public option by increasing the Hospital Insurance payroll tax by 180 percent in 2050 – increasing taxes for working families by $3,900 a year, in addition to costs of coverage and care, to pay for the public option and return the federal debt to pre-COVID-19 projections. 
• Over 30 years, the public option would become the third most expensive government program behind only Medicare and Social Security – both of which are already at risk for the seniors who rely on them.
• Without tax increases, the public option could add as much as $800 billion to the federal deficit in its first 10 years – $100 billion higher than initially estimated. 

This new study provides the latest evidence that new government-controlled health insurance systems like the public option could threaten Americans’ access to affordable, high-quality health care.