NCPA - National Center for Policy Analysis


July 29, 2009

It is a myth that the United States has a free market health care system, says Philip Klein of American Spectator.

Nearly 87 percent of Americans believe that the U.S. health care system needs to be fundamentally changed or completely rebuilt. But because Americans are given the false impression that the current health care system that they view as flawed is a free market, they are more open to remedies that involve an expanded role for government, says Klein.

But in reality, both in terms of direct spending and regulation, government plays a dominant role in health care and impedes the formation of a market-based system in the United States, says Klein:

  • In 2007, the cost of all government health care programs at the federal, state and local level added up to more than $1 trillion, representing 46 percent of the $2.4 trillion in total U.S. health care expenditures.
  • That same year, an analysis of Kaiser Family Foundation data shows, 31 percent of those covered received their health insurance through the government.
  • While the rest of the nation obtains its health care privately, government policies still distort the insurance market.
  • The most significant way the government meddles in the market is through the tax code and as a result, by 2007, 63 percent of the insured population was receiving their coverage through their employers and roughly 6 percent of the covered population purchased its own insurance.

Moreover, many states impose onerous regulations on insurers requiring them to provide certain benefits.  Currently there are nearly 2,000 benefit mandates nationwide driving up the cost of polices by 20 to 50 percent.

However one would describe the convoluted U.S. health care system, a free market it is not, says Klein.

For text: Philip Klein, "The Matter With Myths," American Spectator, July/August 2009.

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