New Study Warns of Rationing, Higher Taxes in Obama Health Care Overhaul

Published August 6, 2009

CHICAGO — The health care overhaul bills championed by the Obama administration and congressional Democrats would result in less health care for consumers and higher taxes for all, a veteran health care policy analyst concludes in a study published Thursday.

Peter Ferrara writes in The Heartland Institute policy study that the Obama health care overhaul legislation would:

  • Impose rationing of health care procedures that will deny consumers care they seek.
  • Restrict consumers’ freedom of choice over doctors and hospitals.
  • Expand the number of health care entitlements to new groups of consumers.
  • Trigger sharply higher taxes to pay for the overhaul.

“There is no rule of reality that says America must have the highest standard of living in the world. Under the Obama health care plan, it soon would not,” writes Ferrara, director of entitlement and budget policy for the Institute for Policy Innovation in Texas. “Today, Americans enjoy the best health care and medical services in the world, an important part of our high standard of living. President Obama … would tear down what is good about the current system and replace it with old-fashioned and outdated socialized medicine policies adopted by other countries, reflecting their lower living standards.”

The Heartland Institute published the 36-page peer-reviewed policy study, “The Obama Health Plan: Rationing, Higher Taxes, and Lower Quality Care,” and made it available free of charge for downloading at

Ferrara, who served in the Reagan White House in the Office of Policy Development, warns the Obama pledge that “if you like the health plan or the doctor you have, you can keep them,” is a hollow promise.

Ferrara writes: “The health care rationing that must result [from the Obama health plan] would mean tremendous sacrifices by doctors, surgeons, specialists, nurses, hospital administrators, and other health professionals. … Would your doctor be willing to keep you?”

On the cost/tax issue, Ferrara asks, “If [the Obama health plan] is going to reduce costs, why must taxes be increased to pay for it?”

He answers his own question by noting Medicaid would be expanded to a vast number of new poor consumers, who inevitably will unleash pent-up demand for health care. Additionally, federal assistance to buy health care could be extended to families that earn up to $100,000 a year.

The Obama plans, he warns, “would result in higher unemployment, fewer jobs, lower wages, and slower economic growth.”

The Heartland Institute is a 25-year-old nonpartisan, nonprofit think tank based in Chicago whose mission is to discover, develop, and promote free-market solutions to public policy issues. It is the publisher of Health Care News, which reaches more than 25,000 readers a month. It also is the home of Consumers for Health Care Choices, directed by Greg Scandlen, a project to expand consumer-driven health care as an alternative to command-and-control regulation of the nation’s health care system.

For further information about the study or to contact the author, Peter Ferrara, contact Dan Miller or Tammy Nash at The Heartland Institute at [email protected] or [email protected]. Or call (312) 377-4000.

The full text of the study is available online at