Sara Gideon, a Democratic candidate for U.S. Senate, speaks with an attendee at a "Supper with Sara" campaign event, Thursday, Oct. 1, 2020, in Dayton, Maine. Credit: Robert F. Bukaty / AP

Welcome to Ad Watch, in which the Bangor Daily News’ political team breaks down who is behind political ads you’re seeing and whether what they are saying is true.

A new ad from a Republican group attacks Democratic U.S. Senate nominee Sara Gideon’s support of a public option over concerns about rural hospitals, but it makes assumptions that ignore certain pieces of what Gideon and other Democrats have proposed.

The ad

Who is behind it?

The ad comes from American Crossroads, a Republican super PAC affiliated with well-known party operative Karl Rove. It shares a staff and offices with One Nation, a dark-money group that has already spent millions this year to boost Sen. Susan Collins, a fourth-term Republican, according to the Center for Responsive Politics.

American Crossroads has spent just over $1 million in Maine’s U.S. Senate race so far. We are tracking all the outside spenders in the race between Gideon, Collins and independents Lisa Savage and Max Linn here.

The major claims, with context

The ad concerns Gideon’s health care agenda, which she rolled out in August. It contained policies that have become relatively mainstream among Democrats, including a public option that would allow people to buy into a Medicare-like program. It is supported by Vice President Joe Biden, the Democratic presidential nominee, and was one of the major provisions dropped from the Affordable Care Act in 2010 to appease moderate Democrats.

The ad says that a public option could result in a tax increase of $2,300 per year on Mainers. The source is not neutral — the figure comes from a report from Partnership for America’s Health Care Future, a dark-money group founded in part by insurance and pharmaceutical companies that could be hurt by a public option, according to the Center for Responsive Politics.

The report examined financing options for a public option and other health care proposals and found that, if Congress wanted to pay for the program through a broad-based tax similar to Medicare’s Hospital Insurance payroll tax, it would require a payroll tax of 4.8 percent, which would amount to $2,300 for the average American worker.

But the report acknowledges a payroll tax is not the only way to fund a public option. Biden suggests paying for a public option by increasing the top income tax rate and the capital gains tax. The nonpartisan Committee for a Responsible Federal Budget estimated those changes would raise $650 billion in ten years. Gideon has similarly called for tax increases for wealthy individuals and corporations.

The ad goes on to argue that Gideon’s proposal could force 75 percent of rural hospitals to close, based on another study by the same insurance and pharmaceutical-funded group. The rationale is that Medicare reimburses hospitals at a lower rate than private insurers, so if more patients were on a Medicare-like public option, hospitals would receive less money.

But the caveat is that Congress sets Medicare reimbursement rates, and could increase rates as part of a health care overhaul. Gideon’s health care plan specifically calls for assigning more hospitals as critical access, which allows them to receive reimbursement based on cost. While this move may not solve the entire problem, it is part of the effort proponents are making to address the concerns of skeptical hospitals.

There are also other factors to consider. Rural hospitals lose money when they treat uninsured patients. They could benefit if those patients were covered by a Medicare-like public option, notes Kaiser Health News. Both Gideon and Biden’s health care plans also call for other changes not related to the public option that would direct more funding toward rural hospitals.

Rural hospitals face a multitude of financial challenges, and Medicare reimbursement rates are one of the policy issues that will likely have to be addressed if Democrats pursue a public option. But the claims made in the ad are based on one specific version of a public option, assuming a particular tax increase and no change in reimbursement rates. That does not line up with what Gideon or other Democrats have proposed.