NCPA - National Center for Policy Analysis


May 22, 2008

The health plan touted by Sen. Hillary Clinton (D-N.Y.) would force people to buy something they cannot afford and then impose a heavy fine on them when they don't buy it, says John Goodman, president of the National Center for Policy Analysis.  At the end of the day, they will be worse off than they were at the outset.  Now Clinton has a rejoinder.  She says she will limit the amount people have to pay in premiums to 5 or 10 percent of their incomes.

For the past three or four decades, per-capita health care spending nationwide has been growing at twice the rate of personal income growth and there are no signs it is abating.  A pledge to limit an individual's burden to no more than 5 percent or 10 percent of income is the equivalent of creating a new entitlement for everyone who reaches the cap, says Goodman.  How big would this entitlement be?  That depends on how you define income and what health expenses you include:

  • The average household already spends 5.6 percent of its income out-of-pocket on health care.
  • Health spending for all purposes is 20 percent of personal income for the nation as a whole.

The Medicare Trustees have said we have already promised more than $100 trillion in Social Security and Medicare benefits over and above premiums and dedicated taxes to people poised to collect on that promise in the coming decades.  On the current path, Medicare and Medicaid will crowd out every other federal government program by mid-century, the Congressional Budget Office has found.  Clinton's plan would extend this entitlement madness to everyone else, says Goodman.

Source: John C. Goodman, "Ten Big Problems with Hillary Clinton's Health Care Plan," Heartland Institute, June 1, 2008.


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