NCPA - National Center for Policy Analysis


October 11, 2004

Sen. John Kerry has a plan to radically change the U.S. health care system. If he is successful, millions of middle-income families will be enrolled in Medicaid, the federal-state health program for the poor. Most people would not be able to continue in the private health plans they have today, says John C. Goodman, president of the National Center for Policy Analysis (NCPA).

The effort to extend health insurance coverage under existing federal programs will be expensive. Emory University Professor Kenneth Thorpe, who helped construct the Kerry plan, estimates the plan will cost $952 billion over nine years. However, Thorpe reduces his projected costs about $299 billion by including savings to the federal government that other estimates judge to be unrealistic or unrelated to the basic plan.

  • If Thorpe's estimate is extended for 10 full years of operation and if questionable savings are ignored (the NCPA estimate), the costs exceed $1 trillion over 10 years -- an amount equal to almost $1,000 per year for every household in America.
  • But the Lewin Group, a respected health care consulting firm, estimates a higher cost of $1.25 trillion over 10 years.
  • And an estimate by former government health officials and actuaries for the American Enterprise Institute projects a cost of $1.5 trillion over 10 years.

Thorpe's estimates show that the cost to insure one new person varies from $2,217 for the near elderly (55 to 64 year olds) subsidy to $14,190 for the employers' catastrophic expense subsidy.

If the goal is not to insure the most number of people for the least amount of money, what is the purpose of this plan? It's hard to escape the conclusion that the real purpose is to remake the health care system, warns Goodman.

Source: John C. Goodman, "Kerry Health Plan: Who Will Pay?" Brief Analysis No. 488, National Center for Policy Analysis, October 8, 2004.

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