NCPA - National Center for Policy Analysis


May 22, 2007

The overriding assumption at work in recent times when it comes to health care is that more government is better.  But a look at the data seems to indicate otherwise, says the Small Business and Entrepreneurship Council (SBE Council).


  • State and local government spending on health and hospitals increased from $115.9 billion in 1995 to $170.2 billion in 2005, according to the latest numbers from the U.S. Census Bureau. 
  • That was a 46.9 percent jump, compared to inflation registering 22.4 percent (as measured by the gross domestic product (GDP) price deflator) over the same period. 
  • Total federal health-related spending -- including health services, research, Medicare and veteran's health care -- exploded over this period -- from $291.7 billion in 1995 to $577.9 billion in 2005, which registered as a 98 percent increase.

What resulted from this rapid increase in spending?  Going with the favorite number cited in the media and by politicians -- that is, the number of uninsured - the answer is absolutely nothing, says the SBE Council:

  • The raw numbers of uninsured actually increased -- from 40.6 million in 1995 to 46.5 million in 2005. 
  • Looking at these as a share of the population, 15.4 percent were uninsured in 1995 versus 15.9 percent in 2005.

If state officials really want to do something constructive in terms of making health care more affordable, they could start with reducing mandates, says the SBE Council.  The Council for Affordable Health Insurance estimated that state mandates jack up the cost of basic health coverage from a little less than 20 percent to more than 50 percent depending on the state.  The equation is simple: reduce mandates and the costs will fall, thus making health care more affordable.

Source: Editorial, "Health Care - More Spending, No Results," Small Business and Entrepreneurship Council, May 17, 2007.


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