Sara Gideon’s “Public Option” on health insurance proving unaffordable, threatens quality and choice

Sara Gideon visits a store in Falmouth during a campaign stop.

WASHINGTON – As some politicians, such as Democratic U.S. Senate candidate Sara Gideon of Maine tout the so-called “public option” as a solution to America’s health care challenges, real-world results in Washington state and attempts in other states are showing that in the real world the plans are unaffordable, will lead to huge tax increases and likely reduce health care choice and quality of care.

The public option sounds simple enough – let people buy into a publicly run health insurance plan as an alternative to private insurance. The problem, or “speed bump” as a recent Bloomberg Law article reported? Premiums are not falling as supporters hoped. In fact, premiums are 5% higher in 2021 than Obamacare premiums were under Washington state’s “Cascade Care” public option plan.

In Maine, Sara Gideon has staked out a position in support of a public option, but has yet to demonstrate how it will improve care, lower costs or increase choice. In fact, the evidence points to real-world outcomes that are quite to the contrary.

According to a report by the U.S. Chamber of Commerce’s Protecting Americans’ Coverage Together (PACT), public option plans like the one supported by Gideon will have similar negative impacts as the extremely disruptive proposals supported by Senator Bernie Sanders and others.

Along with Washington state’s experiment that is proving premiums are not reduced under a public option plan, many American workers will face a loss of comprehensive coverage and quality care they value.

“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,” wrote Katie Mahoney the Vice President of Health Policy at the U.S. Chamber of Commerce.

According to the aforementioned report released by PACT, the arguments that supporters of the public option make that Americans would take home more money by shifting health care costs to the government also falls flat. Because of the differential in tax treatment of private plans versus government plans, worker wages would not rise enough to offset the tax increases required to pay for the plan.

In other words, workers are likely to get the short end of the stick, with their tax burden rising faster than their income, essentially another government induced squeeze on America’s working and middle-class.

Beyond that, the PACT report highlights how government plans typically reduce payments to hospitals and other providers in efforts to control costs. These measures, the report predicts, will lead to reduced quality of health care as the public option takes hold and chokes off critical funding to health care providers.

A public option could lead to huge tax increases on middle-class families and still rack up hundreds of billions of dollars of debt on the American public, according to a report from the Hoover Institution in January of 2020.

“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,” says the report from Hoover Institution.

If adding to the federal deficit isn’t worrisome enough, American workers could take a hit of almost 5% on their paycheck to finance the public option, says the report.

“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.”

The study also found that more than 30 states could face the loss of all private insurance plans over the next three decades and that rural families would be hit especially hard by the public option, being left with few options for coverage at all.

Despite these warnings from the Hoover Institution, PACT and others, Sara Gideon’s health care plan lays out her support plainly, if lacking any detail, saying she would, “Allow anyone to choose to buy into Medicare through a newly created public option, while preserving the choice for those who like their private insurance to keep it.”

While Sara Gideon’s political position on the public option may be clear, perhaps more clear is the position of more than twenty states that have pursued the public option only to find it unworkable and the expert studies that point to the numerous dangers and pitfalls the public option presents.

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