Program on International Policy

Americans on Health Care Policy

August 30, 2000

6. Financial Costs of Expanding Coverage

To support expanded government efforts, Americans show a willingness to accept only modest increases in taxes or insurance premiums, but these levels amount to enough to cover the costs of the programs they say they want.

So are Americans willing to bear the costs of the expansions of coverage that they say they want? As discussed above, asked about the possibility of a large-scale program to provide health insurance that would require a tax increase, most Americans favor a more modest approach. Similarly, there is not a clear majority in favor of a large-scale single-payer government health insurance program more would rather support an employer mandate. And when presented the bill for a national health insurance program in a June 1998 NBC/Wall Street Journal poll, the public was divided. Asked whether the federal government should "guarantee access to health care services for all Americans if it cost [the respondent] an extra two thousand dollars each year in taxes," 43% thought the government should do so, while 46% felt it should not.58

However, most Americans do appear to believe there needs to be some increase in taxes for the purpose of increasing coverage. In December 1999, an ABC News/Washington Post poll asked, "Which of these do you think is more important providing health care coverage for all Americans, even if it means raising taxes, or holding down taxes, even if it means some Americans do not have health care coverage?" A very strong majority (71%) favored providing coverage at the expense of increased taxes, while only one in four preferred holding down taxes. A Kaiser/Harvard study of 1998 voters, taken in December 1998, asked whether respondents would "rather have the federal government spend more to help uninsured Americans get health insurance, or cut federal income taxes for most Americans." This is a higher bar for respondents to clear: the uninsured are not provided coverage but merely helped, and the prospect is having taxes cut, not just held down. Still, a moderate majority of 57% preferred helping the uninsured, compared to 41% who wanted a tax cut.59

Unfortunately, very limited data are available that ask respondents to confront specific costs. The Kaiser/NewsHour study from February 2000 asked respondents if they were willing to pay certain amounts "more per month either in higher health insurance premiums or higher taxes in order to increase the number of Americans who have health insurance coverage." Seventy-nine percent were willing to pay $5 a month, 53% were willing to pay $30 a month, while 41% said they would be willing to pay $50 a month.60 To put this in perspective, if federal tax bills were to go up an average of $5 a month or $60 a year, and corporate taxes were to go up the same proportion, this would result in an increase of approximately $24 billion per year enough to entirely cover the health care costs of about 12 million Americans. Thirty dollars a month would result in $144 billion, more than enough to cover the entire uninsured population of 44 million.

Two other polls found less willingness to accept costs. A Greenwald & Associates survey taken in June 1999 found just 41% willing to pay $50 or more per year in taxes "to guarantee that all Americans have health insurance" when it was spelled out that this would mean covering 43 million Americans now uninsured.61 And in April 1992, a Cambridge Reports poll found the public evenly divided (48% to 48%) over a tax increase of $200 per year to establish a carefully described Canadian-style system of "national health insurance for all Americans."62 In one case the price tag was associated with the specific demand of covering 43 million Americans and in the other case with an elaborate government program modeled after that of another country; thus it is not entirely clear how much the respondent was reacting to the dollar amount proposed.

A Greenwald & Associates poll from February 1998 elicited mixed responses. "In order to guarantee all Americans have access to health insurance," 54% said they would support "a 1% increase in payroll taxes for employees" (42% opposed), but only 42% would support "a 1% increase in income taxes" (54% opposed). Fifty-seven percent supported "a 1% increase in health insurance company taxes."63

Findings Continued >>

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