President Obama’s healthcare plan will hurt the 85 percent of American who already have health insurance in an effort to help the other 15 percent, says Harvard economist Martin Feldstein.
The chairman of President Reagan’s Council of Economic Advisers argues in a Washington Post opinion piece that there must be a better way to aid the uninsured.
“Doing so the Obama way would cost more than $1 trillion over the next 10 years,” he writes.
Obama has proposed raising taxes on the wealthy to pay for his program. But “tax experts know that this won't work,” Feldstein says.
The tax increase for healthcare along with the decision to let Bush era tax cuts expire will drive the top tax rate to 45 percent from 35 percent today, he argues.
That in turn “would change the behavior of high-income individuals in ways that would shrink their taxable incomes and therefore produce less revenue.”
Feldstein also takes issue with Obama’s claim that his healthcare plan will slow spending growth.
“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,” Feldstein writes.
“I don't believe it.”
Administration officials say it will be easy to cut healthcare spending because patients in the last year of their life account for about half of hospital costs.
“I don't find that persuasive,” Feldstein says.
“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.”
Feldstein doesn’t deny that healthcare reform is necessary. One change he recommends is “fixing the COBRA system so that middle-income households that lose their insurance because of early retirement or a permanent layoff are not deterred by the cost of continuing their previous coverage.”
But Feldstein recommends that Obama focus on the economy for now.
“The president should look beyond health policy and turn his attention to the problems that are impeding our economic recovery.”
A bi-partisan group of six senators that is putting together a healthcare bill already has adopted two of Feldstein’s proposals. They have dumped the idea of a healthcare tax on the wealthy and the idea of a government-run insurance plan that would compete with the private sector, The New York Times reports.
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