Kerry Plan Would Radically Change Health Care

New NCPA Study Shows Plan Also May Not Solve Problem of Uninsured

DALLAS (September 10, 2004) – Sen. John Kerry’s new health care plan would virtually destroy the individual and small-group health insurance markets and most Americans would not be able to remain in the private health plan they have today, according to a study published today by the National Center for Policy Analysis (NCPA).

Instead, millions of middle-income families will enroll in Medicaid and millions more will get insurance through a system of managed competition similar to what Hillary Clinton proposed more than a decade ago, the study concludes.

“Sen. John Kerry wants your money and your life,” said NCPA President John C. Goodman.

Sen. Kerry’s goal is to insure two-thirds of the estimated 44 million uninsured Americans. But the cost, according to the NCPA study, would exceed $1 trillion over 10 years. And more than half the money would subsidize moving people who already have private insurance to public programs by expanding Medicaid and SCHIP programs for the poor. And employers will receive similar subsidies even if they fail to insure a single additional employee.

“The bottom line is that it’s entirely possible to spend $1 trillion and not reduce the number of uninsured,” Goodman said, adding that the quality of care would suffer under the Kerry proposal:

  • People who go from employer plans to Medicaid will have fewer choices among doctors, longer waits for care and will experience health care rationing.
  • Others will face a system of managed competition that over-provides to the healthy and under-provides to the sick and poor.

The Kerry plan will almost certainly lead to a new round of health care inflation, according to the study. Federal spending alone will increase by more than $100 billion per year. But since there will be no increase in supply of health care services, the bulk of Kerry’s new spending will only buy higher prices not more health care.

“Faced with virtually no out-of-pocket costs, the 26 million new enrollees in Medicaid will find no reason to restrain spending,” Goodman explained. “The bills all go to someone else.”