NCPA - National Center for Policy Analysis


November 19, 2009

It's too bad the health care overhaul that House Democrats narrowly approved last week isn't a medical product.  If it were, it would have to come with a warning label, says Michael F. Cannon, director of health policy studies with the Cato Institute.

This product will increase your health insurance premiums:

  • Millions who are satisfied with their current, low-cost health plans would have to switch to more expensive plans, solely because Congress decided they weren't buying enough coverage.
  • The legislation would increase premiums even further over time, as drug companies, chiropractors, acupuncturists, fertility specialists and other special interests lobby Congress to force you to purchase coverage for their services too.

This product will reduce the quality of your health care:

  • America's health care sector is often inconvenient, poorly coordinated, and makes less use of information technology than your local supermarket; research shows that medical errors kill as many as 100,000 Americans per year.
  • Markets would solve those problems, but government thwarts doctors and entrepreneurs who try to improve quality; Medicare -- by far the largest purchaser of medical services in the world -- actually penalizes doctors and hospitals that reduce medical errors.
  • The House bill would cement those deficiencies in place with yet another massive government program, and create new quality problems, like insurers skimping on care and customer service for the sickest patients.

This product probably won't make you healthier:

  • The House bill would expand coverage, but at a steep cost and with zero evidence that doing so is a cost-effective way of improving health.
  • Little research supports the notion that broadly expanding insurance coverage makes people healthier; Medicare established near-universal coverage for the elderly, yet research shows that program didn't save a single life in its first 10 years of operation.
  • Whether it has had any subsequent impact on mortality rates -- positive or negative -- remains an open question.

This product will make you poorer:

  • The House bill contains at least $2 trillion in explicit and implicit taxes.
  • Tax rates for wealthy Americans would rise to 45 percent, with an ever-expanding definition of "wealthy."
  • For the middle class, effective tax rates would average 60 percent to 70 percent and exceed 100 percent in some cases.

Source: Michael Cannon, "Warning label for PelosiCare," Orange County Register, November 14, 2009.

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