NCPA - National Center for Policy Analysis


September 16, 2004

Sen. Kerry's health plan would cost about $1.5 trillion over 10 years, according to the American Enterprise Institute, compared to only $128.6 billion for President Bush's health plan. The AEI assumes the Kerry Plan would insure some 27.3 million people, with $620 billion spent directly on coverage for the uninsured, while the Bush plan would insure about 6.7 million at a direct cost of $39.4 billion for the uninsured.

  • Under Kerry, employers would receive subsidies for catastrophic medical costs incurred by a patient, while Bush's plan would provide a tax credit for small employers who contribute to an employee's health savings account (HSA).
  • Under Kerry, small businesses, the unemployed and older individuals would be eligible for tax credits; Bush's plan would allow tax credits for low-income individuals purchasing non-group insurance or above-the-line deductions for individuals purchasing major medical policies in conjunction with HSAs.

In analyzing Kerry's plan from the years 2006 to 2015, AEI researchers discovered:

  • The costs for extending eligibility for Medicaid and the State Children's Health Insurance Program eligibility, as well as providing subsidies to small business and individuals would total an estimated $1.6 trillion;
  • Proposed savings through promoting disease management and health information technology would be miniscule, totaling less than $100 million.
  • The savings from reducing Medicare Advantage payments and disproportionate share payments would total about $102 billion.

In essence, Kerry's health plan overestimates expected savings and underestimates expected costs. Moreover, the estimates from his own health plan adviser, Kenneth Thorpe, cover only nine budget years, but the next president's control over the budget will actually cover ten years.

Source: Joseph Antos et al., "Analyzing the Kerry and Bush Health Proposals: Estimates of Cost and Impact," American Enterprise Institute, September 13, 2004.

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