ICYMI: A Public Option Could Increase the National Deficit by $1.2 Trillion

WASHINGTON, D.C. – Last week, a new study from Lanhee Chen, Tom Church, and Daniel L. Heil, on behalf of the Partnership for America’s Health Care Future, 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.”    

The new study from Lanhee Chen, Tom Church, and Daniel L. Heil found:   

• Higher inflation and changes to federal reimbursement rates to health care providers suggest an even larger price tag for the public option than previously estimated, increasing deficits by $1.2 trillion in its first ten years. (Lanhee Chen, Tom Church, and Daniel L. Heil, 08/02/23) 
  • Financing the public option would require dramatic increases in: 
  • the corporate tax rate by 33.4 percent (Lanhee Chen, Tom Church, and Daniel L. Heil, 08/02/23) 
  • income taxes for middle-income families by $3,400 (Lanhee Chen, Tom Church, and Daniel L. Heil, 08/02/23) 
  • the Medicaid HI payroll tax (Lanhee Chen, Tom Church, and Daniel L. Heil, 08/02/23) 
• 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. (Lanhee Chen, Tom Church, and Daniel L. Heil, 08/02/23) 

View the full findings here.   

Research continues to show that government-controlled health insurance systems like the public option, Medicare buy-in, and Medicare for All could come with unaffordable costs for American families. Instead of starting over from scratch with these unaffordable proposals, lawmakers should continue to build on and improve what’s working in health care to expand access to affordable, high-quality health care coverage for every American.  

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