Democrat Health Proposals Draw Fire, Institute Offers Alternate Plan

Democrat Health Proposals Draw Fire, Institute Offers Alternate Plan

Report Concludes Reform Plans Would Worsen Cost and Coverage Problems

Washington, D.C., September 9, 2009—As President Obama prepares for his health care speech to a joint session of Congress Wednesday evening, a new report from the Competitive Enterprise Institute calls on the President to acknowledge that America’s health care system is plagued by too much, not too little, regulation.

The study concludes that tax preferences for employer-sponsored health insurance, as well as federal and state benefit mandates and pricing regulations, distort the health care market in a way that limits choices for individuals, reduces competition among insurers, and artificially inflates costs for health care services.

“Many of the problems with run-away healthcare costs can be traced to the third-party-payment system and a maze of complex federal and state insurance regulations,” write co-authors Gregory Conko and Philip Klein. “More government intervention will only add cost and complexity to the health care system without solving the underlying problems.”

“To broaden affordable coverage, prior reform efforts have implemented restrictions that raise the price of insurance coverage, leading many healthy individuals to forgo insurance altogether,” write the authors.  “These laws give patients and doctors incentives to over-spend on health services and force individuals to pay for benefits they don’t need or want.”

Instead, Conko and Klein recommend reforms that eliminate market-distorting government regulations and use targeted programs to help subsidize the small number of remaining uninsured who cannot get or afford health insurance. Among the recommendations:


  • Reform tax policy to eliminate the disincentives for individual purchase of health insurance and health care. Tax and regulatory policy should not discriminate between employer-sponsored arrangements and individual purchase.
  • Do away with barriers that prevent small businesses from pooling and self-insuring health risks, and laws that prevent interstate purchase of health insurance by individuals and businesses.
  • Eliminate artificial restrictions on the supply of health care services and products, such as the overregulation of drugs and medical devices, as well as state and federal restrictions on who may provide medical services and how they must be delivered.

Read the report, Political Malpractice: Health Insurance Misdiagnosis and the Destruction of Medical Wealth

Watch CEI’s Policy Translated: Health Care – a serious and humorous take on health care policy

Read more by Gregory Conko, CEI Senior Fellow