HARRISBURG, PA — The Commonwealth Foundation released a report today showing that President Obama’s proposed takeover of health care by the federal government would have dramatically negative effects on Pennsylvanians.
The report, written by a research team headed by noted economist and former presidential advisor Dr. Arthur Laffer, entitled, The Prognosis for National Health Insurance: A Pennsylvania Perspective, finds that President Obama’s health care proposal would have the following effects:
- It would add $4,453 in additional health care costs for every man, woman, and child in Pennsylvania.
- Despite the additional $1 trillion in expected health care subsidies, 30 million people nationally would remain uninsured. The cost to reduce the number of uninsured by 16 million is $62,500 per person insured.
- Pennsylvania’s economic growth in 2019 compared to the baseline scenario would be reduced by 5.1 percent.
“President Obama’s proposal for nationalized, government-run health care would be a potent dose of bad medicine for Pennsylvania,” said Commonwealth Foundation president and CEO Matthew J. Brouillette. “It will make health care even more expensive and diminish its quality while also raising taxes, stunting job growth, and diminishing our standard of living. This is not to say we don’t need to reform our health care system. We do. But the proposed Obama cure is clearly worse than the disease.”
The report recommends the following reforms:
- Equalize the tax treatment of health coverage, so that individuals—not employers or government—own their health coverage.
- Repeal benefit mandates on insurers. State mandates (Pennsylvania has 52) drive up the cost of coverage. A recent study finds that each mandate results in about a 0.25% increase in the number of uninsured.
- Allow residents to purchase insurance plans approved in any of the 50 states. One estimate suggests interstate competition would reduce the number of uninsured by 25 to 33 percent.
- Repeal state laws which drive up the cost of prescription drugs, requiring higher prices than places like Wal-Mart would otherwise charge.
- Overhaul the Medicaid system, converting Medicaid spending into simple vouchers for low-income individuals to purchase their own insurance. This would improve quality, save costs to taxpayers, and reduce the price of private insurance by eliminating cost shifting.
- Adopt tort reform, eliminating frivolous lawsuits and jackpot jury awards that drive up the cost of health care.
“The decision facing lawmakers is not whether to enact health care reform, but which direction to take,” concluded Brouillette. “ Only a move to patient control of health care—not more political power in Washington or Harrisburg—will reduce costs and improve the quality of our health care system.”
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EDITOR’S NOTE: The policy report, The Prognosis for National Health Insurance: A Pennsylvania Perspective, prepared for the Commonwealth Foundation by Dr. Arthur Laffer, Donna Arduin, and Dr. Wayne Winegarden of Arduin, Laffer & Moore Econometrics, is available here or by calling 717.671.1901.