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Economist Martin Feldstein on Obamacare

John on July 28, 2009 at 3:14 pm

According to his bio, Feldstein is “a professor of economics at Harvard University and president emeritus of the nonprofit National Bureau of Economic Research.” Here’s what he has to say about Obamacare:

For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement…

Although the president claims he can finance the enormous increase in costs by raising taxes only on high-income individuals, tax experts know that this won’t work. Experience shows that raising the top income-tax rate from 35 percent today to more than 45 percent — the effect of adding the proposed health surcharge to the increase resulting from letting the Bush tax cuts expire for high-income taxpayers — would change the behavior of high-income individuals in ways that would shrink their taxable incomes and therefore produce less revenue. The result would be larger deficits and higher taxes on the middle class. Because of the unprecedented deficits forecast for the next decade, this is definitely not a time to start a major new spending program.

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A recent report by the White House Council of Economic Advisers claims that the government can cut the projected level of health spending by 15 percent over the next decade and by 30 percent over the next 20 years. Although the reduced spending would result from fewer services rather than lower payments to providers, we are told that this can be done without lowering the quality of care or diminishing our health. I don’t believe it.

To support their claim that costs can be radically reduced without adverse effects, the health planners point to the fact that about half of all hospital costs are for patients in the last year of life. I don’t find that persuasive. Do doctors really know which of their very ill patients will benefit from expensive care and which will die regardless of the care they receive? In a world of uncertainty, many of us will want to hope that care will help…

The administration’s health planners believe that the new “cost effectiveness research” will allow officials to eliminate wasteful spending by defining the “appropriate” care that will be paid for by the government and by private insurance. Such a constrained, one-size-fits-all form of medicine may be necessary in some European health programs in which the government pays all the bills. But Americans have shown that we prefer to retain a diversity of options and the ability to choose among doctors, hospitals and standards of care.

At a time when medical science offers the hope of major improvements in the treatment of a wide range of dread diseases, should Washington be limiting the available care and, in the process, discouraging medical researchers from developing new procedures and products? Although health care is much more expensive than it was 30 years ago, who today would settle for the health care of the 1970s?

Obamacare is DOA. Let’s hope whatever compromise is reached will offer Americans more than government control, higher taxes, abortion paid for by a country that doesn’t support it in most cases and the promise to let granny die on the cheap to save money. No thanks, Barack.

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Category: Health & Education |

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