New Study Favors More Government Health Care, Sparks Broad Skepticism

Published June 1, 2007

In mid-March, a nonprofit group released a study finding two of the universal health care bills currently pending in the U.S. Congress would cover more uninsured Americans than President George W. Bush’s tax break plan.

The Commonwealth Fund, a nonprofit health care policy research group based in New York City, compared 10 bills introduced in 2006 and 2007, as well as Bush’s plan. The study concluded two bills calling for massive expansions of government health care systems would provide more health insurance to the 45 million uninsured residents nationwide than would tax breaks that encourage them to purchase private coverage.

Many analysts say those results were based on a faulty premise.

“It’s easy to ‘cover’ more people by throwing them into government-run health care or simply ordering them to pay for private health insurance. It takes a lot more insight to take money out of the health care system and give it back to patients, which is what President Bush’s plan does,” explained John R. Graham, director of health care studies at the Pacific Research Institute, a free-market think tank in San Francisco.

Less Coverage?

According to the study, a bill sponsored by Rep. Pete Stark (D-CA) expanding Medicare and employer-based health coverage would cover 45.8 million people, while saving low- and middle-income families $142.6 billion this year. A similar bill, sponsored by Sen. Ron Wyden (D-OR), would cover 45 million people and save low- and middle-income families a total of $78.8 billion this year.

Bush’s plan, the study claimed, would cover only 9 million uninsured people and would cause the federal government’s health care spending to fall by $31 billion.

Under Bush’s plan, the study finds, low-income families would each see annual savings of only $23, but families earning at least $150,000 annually would each save an average of $1,263 per year. Moreover, administering Bush’s plan would cost $5.5 billion, but under the other plans government administration costs would fall, the study found.

No Savings

But “none of those plans ‘save’ anything,” said Ryan Ellis, federal affairs manager at Americans for Tax Reform. “Low-income families might pay less in health care, but they’ll more than pay for that ‘benefit’ with higher taxes and lower wages.

“If socialized medicine worked, why would governments around the world be abandoning it?” Ellis continued. “Personalized, patient-centered medicine is the health care of the future. One-size-fits-all, industrial-planning medicine is the health care of the past.”

Moreover, expanding government health care at the expense of private coverage is likely to result in lower-quality care across the board, critics say.

A 2005 policy analysis by Michael Cannon, director of health policy studies at the Cato Institute, a think tank in Washington, DC, noted, “adults who are eligible for Medicaid but have private coverage have fewer unmet medical needs than eligible adults who are enrolled in the program. … HIV patients with [private] health coverage are less likely to die prematurely” than those in government programs.

More Freedom

Another problem, said Mike Tanner, Cato’s director of health and welfare studies, is that health insurance and high-quality health care are not synonymous.

“Simply saying people have insurance is meaningless,” Tanner said. “All around the world, countries provide universal insurance but deny the actual care people need.

“For example, one million Britons are waiting for admission to National Health Service hospitals at any given time, and shortages force the NHS to cancel as many as 100,000 operations each year,” Tanner continued. “In Sweden, the wait for heart surgery can be as long as 25 weeks, while the average wait for hip replacement surgery is more than a year.

“In Canada, more than 800,000 patients are currently on waiting lists for medical procedures,” Tanner noted. “According to the Canadian Supreme Court, many of these individuals are in pain and some will die while awaiting the treatment they’ve been promised.”

Graham agrees.

“So [Bush’s] tax reform does not automatically insure more Americans, like the other ones do,” Graham said. “It gives working Americans more freedom to decide how they want their health dollars spent, which is far more important.”

Karla Dial ([email protected]) is managing editor of Health Care News.

For more information …

“Congressional Health Care Bills, 2005-2007: Part I Insurance Coverage,” Commonwealth Fund, March 19, 2007,

“Medicaid’s Unseen Costs,” by Michael F. Cannon, Policy Analysis #548, August 18, 2005,