NCPA - National Center for Policy Analysis

Kerry Health Plan is Sickly, Unrealistic

May 14, 2004

Presidential candidate John Kerry's proposed health plan sounds ideal when he's on the campaign trail, but a further look reveals it simply shifts costs and adds bureaucratic control, say observers.

According to the Wall Street Journal the plan is loaded with "goodies," including:

  • A 50 percent tax credit on the premiums paid by small businesses for providing health coverage.
  • A 75 percent coverage by the government for individuals with medical bills exceeding $50,000 per year, if the individual is covered by a private employer.

The Kerry campaign claims that the federal payment for those with high medical bills will reduce premiums for employers as well as employees by 10 percent.

The federal coverage would be offered only to employers who meet three criteria:

  • Those who provide special health care programs for people with chronic diseases.
  • Those who offer "affordable" health insurance to all employees (including part-time workers).
  • Those who pass the estimated savings along to employees.

According to former Clinton administration health economist Kenneth Thorpe, the plan will cost $257 billion over 10 years and provide no incentive for enrollees to reduce their own health care costs through wise use of their co-pay dollars.

Moreover, the plan's requirement that employers pass along savings to their employees is complex; after all, it would require government intervention and oversight to check to see if employers really are passing on the savings.

Finally, the health plan will raise questions as to what procedures the government should pay for, and who will make those decisions.

Source: David Wessel, "Kerry Health Plan Simply Shifts Costs," Wall Street Journal, May 13, 2004.

For WSJ text (subscription required),,capital,00.html


Browse more articles on Health Issues