Critical Condition

Laffer Takes on Democrats’ Health-Care Plans

The health-care-reform plans pending in Congress would cause more harm than good, according to a study released today by internationally renowned economist Arthur Laffer.

In his paper for the Texas Public Policy Foundation, “The Prognosis for National Health Insurance,” Laffer concludes that the current proposals being discussed in Washington would:

* Add $285.6 billion to the federal deficit in 2019

* Increase national health-care expenditures by an additional 8.9 percent

* Raise medical price inflation 5.2 percent above what it would have been otherwise

* Reduce U.S. economic growth in 2019 by 4.9 percent compared to the baseline scenario of doing nothing

* Impose an additional financial burden of $4,354 for every man, woman, and child in the U.S.

* Still only insure about one-third of those currently without insurance — at a cost of approximately $62,500 per new person insured.

The study recommends that reforms to America’s health-care system should focus on closing what Laffer has coined the “health-care wedge” — a separation of effort and reward by which patients understand the true costs of their health care. He blames this separation for our skyrocketing health-care costs.

The full report, which also highlights patient-centered solutions that Laffer says will diminish that wedge, may be downloaded at In the coming days, information will be added that details the impact of the proposed legislation to several individual states.

David Guenthner is Director of Media and Government Relations for the Texas Public Policy Foundation.

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