Basic assumptions about the long-term costs of a public option are flawed. Research we have done shows that a public option will mean soaring deficits and debts because politicians in Washington will eventually succumb to political pressure both to subsidize enrollee premiums and to pay doctors and hospitals closer to what they are paid by private insurance rather than by existing government programs like Medicare and Medicaid. According to our calculations, the public option would add $800 billion to deficits in the first 10 years and increase the federal debt by more than 30% of the gross domestic product by 2050 — the equivalent of $6 trillion in today’s economy.
The effects on the budget are even worse when the economy suffers or if health costs unexpectedly rise. How much worse? With support from the Partnership for America’s Health Care Future — a coalition of leading health care providers, insurers, biopharmaceutical companies and employers that oppose one-size-fits-all health care — we looked at a few ways policymakers might adjust the public option to respond to future economic shocks and the impact these changes would have on long-term deficits and debt.
Author(s): Lanhee J. Chen, Tom Church, and Daniel L. Heil
Publication Date: 11 February 2021
Publication Site: Stat News