NCPA - National Center for Policy Analysis


January 25, 2007

Just because spending on health care is going up at a fast pace in the United States isn't necessarily a sign that something is wrong.  More likely it is a sign that we are a wealthy nation that, by and large, has taken care of the essentials of life.  As a result, we can afford to spend a bigger chunk of each extra dollar we make on former luxuries, like better vacations, a new laptop and gold-plated health care, says Investor's Business Daily (IBD).

  • According to the Organization for Economic Co-operation and Development (OECD), the top spenders on health care on a per capita basis are the United States, Luxembourg, Switzerland and Norway.
  • The top countries in terms of per capita income are Luxembourg, the United States, Norway and Switzerland.

Clearly there's a relationship between economic health and spending on health care.  And to the extent that the United States spends too much on health care, the government isn't the answer.  It's the problem, says IBD.

At every level, government has for decades imposed incentives, rules and regulations, mandates, and subsidies that have pushed up the cost of care.  Government tax and spending policy alone has fueled health care spending by encouraging the rise of "third party" payments in health care:

  • California alone has 48 mandates on state insurance companies, requiring coverage for such things as speech therapists, chiropractors, acupuncturists, contraceptives and infertility treatments, according to the Council for Affordable Health Insurance (CAHI); Massachusetts has 40.
  • Insurance costs are far higher in those states than in states with fewer mandates; the CAHI study found that these coverage mandates boosted the cost of insurance by as much as 20 percent to 50 percent.

Source: Editorial, "Health Care Gluttons?" Investor's Business Daily, January 24, 2007.

For CAHI study:


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