NCPA - National Center for Policy Analysis


October 17, 2008

Barack Obama's cure for health care is a new payroll tax that employers would have to pay, unless they paid 75 percent of the premiums for an employee health care plan specified by the government.  However, the cost of the tax will be almost completely borne by workers in the form of lower wages, says John C. Goodman, president of the National Center for Policy Analysis (NCPA). 

This added costs, says Goodman, encourages employers to hire fewer workers, adopt labor saving technology, employ part-time workers and outsource labor to independent contractors and other entities.

Moreover, everything in Obama's health proposal involves higher government taxes, higher government spending and more government regulation:

  • His National Health Insurance Exchange -- Americans could purchase health insurance and choose among private insurers whose generous plans would cover all "essential" services -- is a very expensive plan that the government (taxpayers) will pay for.
  • Undoubtedly, this plan will be designed and priced to involve even more government subsidies, to get more people into the trap of socialized medicine, increasing the spending burden further.
  • His plan would reimburse employer health plans for a portion of the catastrophic costs they incur above a threshold; but this really means that taxpayers would pay for the high costs of all employer plans above an unspecified threshold.
  • Obama's regulations would also require all plans to be community rated -- everyone has to be charged the same premium, regardless of illness or costs when they first sign up.

For these and other reasons, the costs of Obama's plan would soar, says the American Spectator.  The plan is already estimated to add $250 billion in new government spending each year.  Like all government run, socialized health care plans, with no market incentives to control costs, it will soon be scrambling for cost control, and could result in government rationing of health care.  This is an extremely undesirable situation, adds the Spectator.

Source: Peter Ferrara, "Barack Obama's Health Care Lies," American Spectator, October 15, 2008.

For text: 


Browse more articles on Health Issues