Bradley's Expensive Health Insurance Plan
October 25, 1999
Democratic presidential candidate Bill Bradley recently came up with his own plan to improve health care in America. Essentially it would: open the Federal Employee Health Benefits Program to the entire nation, have the federal government pay the health insurance premiums of low- and medium-income households, and introduce regulations and controls to reduce costs and impose greater uniformity of care.
Economist Martin Feldstein has some problems with that approach:
- While Bradley estimates the ensuing costs at about $65 billion a year, Feldstein puts the figure at about $110 billion in the first year -- or $1.4 trillion over 10 years.
- If the cost were $110 billion in 2002, that would exceed 10 percent of total personal income tax revenue that year -- necessitating a tax increase of $850 that year for a family with $50,000 in taxable income.
- All parents would be required to buy government-approved health insurance for their children and only those with incomes under $32,800 would be fully reimbursed for the cost.
- While Bradley claims that his plan would achieve 95 percent coverage for the population, that is suspect since 10 million of those currently uninsured are in families with incomes over $50,000 -- who would not receive any subsidy and would remain uninsured.
Nor is there any way that the subsidies could reduce the 35 million uninsured with incomes under $50,000 to just four million -- especially since many of the uninsured adults have incomes over the $32,800 level at which the subsidy for adults ends.
Source: Martin Feldstein (Harvard University), "Dr. Bradley's Bad Medicine," Wall Street Journal, October 19, 1999.
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