Harvard economist Martin Feldstein, who also serves on President Obama’s Economic Recovery Advisory Board, attacked the Administration’s health reform plans in a Washington Post op-ed today. Feldstein says that there are many options available to Obama, but he has approached the problem incorrectly.
For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement.
Obama’s plan is going to result in higher middle class taxes.
Although the president claims he can finance the enormous increase in costs by raising taxes only on high-income individuals, tax experts know that this won’t work. Experience shows that raising the top income-tax rate from 35 percent today to more than 45 percent — the effect of adding the proposed health surcharge to the increase resulting from letting the Bush tax cuts expire for high-income taxpayers — would change the behavior of high-income individuals in ways that would shrink their taxable incomes and therefore produce less revenue. The result would be larger deficits and higher taxes on the middle class. Because of the unprecedented deficits forecast for the next decade, this is definitely not a time to start a major new spending program.
Feldstein even tackles the euthanasia question…
To support their claim that costs can be radically reduced without adverse effects, the health planners point to the fact that about half of all hospital costs are for patients in the last year of life. I don’t find that persuasive. 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.
Americans don’t want to stifle innovation. That’s what sets us apart from the healthcare systems of other countries.
The administration’s health planners believe that the new “cost effectiveness research” will allow officials to eliminate wasteful spending by defining the “appropriate” care that will be paid for by the government and by private insurance. Such a constrained, one-size-fits-all form of medicine may be necessary in some European health programs in which the government pays all the bills. But Americans have shown that we prefer to retain a diversity of options and the ability to choose among doctors, hospitals and standards of care.
At a time when medical science offers the hope of major improvements in the treatment of a wide range of dread diseases, should Washington be limiting the available care and, in the process, discouraging medical researchers from developing new procedures and products? Although health care is much more expensive than it was 30 years ago, who today would settle for the health care of the 1970s?
Feldstein also suggests Obama should spend more time working on the economic recovery.
Now that congressional leaders have made it clear that Obama will not see health legislation until at least the end of the year, the president should look beyond health policy and turn his attention to the problems that are impeding our economic recovery.