Unaffordable Costs Of The Public Option Continue To Make Headlines

WASHINGTON – As the unaffordable costs of the public option are made clear to voters, Vice President of Health Policy at the U.S. Chamber of Commerce Katie Mahoney notes that despite promises that a public option would lower costs, Washington state’s “public option plan, ‘Cascade Care,’ is a more costly health coverage option than what consumers were paying for their private coverage.” 

• Bloomberg Law reports in a story titled “Public Option Experiment Hits Speed Bump as Premiums Don’t Fall,” that “[p]remiums aren’t dropping as predicted in Washington state’s first-in-the-nation experiment with offering health insurance plans based on Medicare rates.”  In fact, “average proposed public option rates 5% higher than 2020 Obamacare premiums.”

High costs and unaffordable tax hikes have doomed similar attempts to implement one-size-fits-all government health insurance systems on the state level.  “More than 20 states have pursued the public option as a solution to the country’s cost challenges,” Maloney notes, adding:  

However, despite assurances to the contrary, higher premiums are not the only repercussion.  We can expect this latest dangerous experiment to drive up significant costs for families covered through other avenues in Washington state and, eventually, those across the country, as a result.

If Washington state’s 2021 public option premiums tell us anything, it’s that this new option is far from a silver bullet to reduce health costs and instead will likely make it harder for Americans to access health care services.  Rather than focusing on failing proposals, it’s time for Congress to strengthen and enhance the current, reliable employer-sponsored insurance system that continues to be the driving force for health care innovation across the country.

Not only would the public option burden American families with unaffordable new costs but would also threaten to undermine the health care choice and control millions of Americans rely on. A recent report released by the U.S. Chamber’s Protecting Americans’ Coverage Together (PACT) finds that “by shifting employees prematurely into a public option for health coverage, millions of American workers and their families stand to lose the comprehensive coverage and quality care that they depend on and value.  Worse, by introducing this option, the nation will see significant disruption in access across the health system and an increase in costs at a time when stability is critically important,” Maloney adds. 

This Adds To The Growing Body Of Research That Demonstrates That The Public Option Could Burden American Families With Unaffordable New Costs And Tax Hikes… 

• 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)
• The public option could add as much as $700 billion to the federal deficit in its first 10 years. (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)

… And Eliminate Consumer Choice & Control. 

• The public option could eliminate consumer choice for millions of Americans and “eventually cause the elimination of all private plans in the individual market.” (FTI Consulting, 11/18/19)
• After the first 10 years of the public option, more than seven million Americans with private coverage could no longer have coverage through the marketplaces – with two million of those enrollees being forced off their private plans as insurers exit the marketplaces altogether. (FTI Consulting, 11/18/19)
• The study also warns that the public option could eventually cause the elimination of all private plans in the individual marketplaces, eliminating choice for millions of Americans, even those with the resources or subsidies available to cover their preferred plan. (FTI Consulting, 11/18/19)
• In fact, the report finds that by 2050, 70 percent of state marketplaces (34 U.S. states) could no longer offer a single private insurance option. (FTI Consulting, 11/18/19)
• Rural families could be especially hard hit by the public option, the study warns, and could find few if any options available to them. (FTI Consulting, 11/18/19)