A Public Option Could Increase the National Deficit by $1.2 Trillion
As some politicians consider unaffordable and unproven proposals like the public option, new research from Lanhee Chen, Tom Church, and Daniel Heil, on behalf of the Partnership for America’s Health Care Future, shows creating a national public option could raise taxes for Americans and add to the national deficit. The report, found that “paying for the public option would require more than doubling the corporate tax rate, increasing the top three income tax rates by one-third, or raising the Medicare Hospital Insurance payroll tax by over 150 percent.”
Key findings from the report include:
- A public option could increase the federal deficit by $1.2 trillion in its first ten years due to higher inflation and changes to federal reimbursement rates to health care providers for the services they provide to patients.
- Financing the public option would require dramatic increases in:
- income taxes for working families by $3,400
- the corporate tax rate by over 33 percent
- the Medicare Hospital Insurance payroll tax
- By 2053, spending on the public option would account for 3 percent of GDP and be larger than Medicaid. Current projections put long-term federal debt at 195 percent of GDP; the public option would push it even further to 228 percent.
THE TRUTH:
Instead of starting over from scratch with unaffordable proposals like the public option, lawmakers should continue to build on and improve what’s working in health care. Research shows that building on our current system is a more effective path to expanding access to affordable, high-quality health coverage and care than creating a government-controlled public option. Polling also continues to show that voters prefer to keep building on what’s working, rather than start over by creating new, government-controlled health insurance systems.