STUDY: The Budget and Tax Effects of a Federal Public Option After COVID-19
A new study released by Lanhee J. Chen, Ph.D., Tom Church, and Daniel L. Heil, with support from the Partnership for America’s Health Care Future, finds that the public option could increase the federal deficit by $800 billion over 10 years or require a more than $2,500 a year tax increase on the average American family. These tax increase and deficit estimates both represent increases from Chen, Church, and Heil’s projections made earlier this year.
The study, “The Budget and Tax Effects of a Federal Public Option After COVID-19,” reveals that during this critical time, the public option would become unaffordable for working families.
According to the study, the public option “would eventually become the third-largest government program. The prospect of a costly new government program comes at an inopportune time … Without major spending reforms, avoiding this unprecedented increase in the federal debt will require significant tax increases. Policymakers must account for this prospect before enacting new spending programs. This is particularly true when considering expensive programs like a politically realistic public option, which would likely require further tax increases.”
American families are relying on our health care system during this critical time to provide affordable health coverage and care during this critical time. Working families can’t afford a one-size-fits-all government health insurance system like the public option, which could raise taxes for the average American family, in addition to the cost of their current coverage.
Under the public option, personal income tax rates could increase by 18 percent across the board, the study warns. Alternatively, politicians could finance the public option by “increasing the Hospital Insurance payroll tax by 180 percent in 2050, with taxes for typical families rising by over $3,900.”
We should focus on building on what’s working, where private coverage, Medicare and Medicaid work together to provide every American with affordable, high-quality health coverage and care – not start over with an unaffordable government health insurance system like the public option.