EPI-Sponsored Research Offers Market-Based Solutions to the Healthcare Crisis

Bush to echo recommendations on healthcare in State of the Union Address
  • Publication Date: January 2006

  • Topics: Health Care

Washington, DC – President Bush’s strategy to address the nation’s ailing healthcare system is expected to draw heavily from the counsel of economists R. Glenn Hubbard, John F. Cogan, and Daniel Kessler, who recently encapsulated their recommendations in the peer-reviewed journal Health Affairs. This influential work was sponsored by the Employment Policies Institute (EPI) and is available through the EPI website at www.old.epionline.org/MakingMarketsWork.

EPI research has found that employer-provided healthcare mandates fail to reach a vast number of the uninsured and ultimately result in job loss for America’s low-skilled employees. In order to increase healthcare coverage without triggering these unintended consequences, former chairman of the White House Council of Economic Advisers R. Glenn Hubbard, former White House economic adviser John F. Cogan, and Daniel Kessler, professor of economics, law, and policy at Stanford University, recommend implementing policies and tax breaks that reduce the cost of healthcare for individuals. Among their recommendations:

* “All Americans should be entitled to deduct health insurance and out-of-pocket health care expenses as long as they purchase insurance.”
* “Mak[e] all individuals eligible for HSAs [Health Savings Accounts] conditional on the purchase of insurance that covers at least catastrophic expenditures.”
* “[O]ffer low-income households financial assistance to purchase health services. Specifically, we propose a refundable tax credit.”
* “We propose that insurance companies that meet certain federal standards be permitted to offer plans nationwide, free from costly state mandates, rules, and regulations.”
* “We propose a subsidy to help people with predictably, persistently high health costs to purchase insurance in the new nationwide market.”

“The recommendations of Cogan, Hubbard, and Kessler will have the greatest impact on the cost and access issues surrounding healthcare,” said Richard Berman, executive director of the Employment Policies Institute. “Instead of managing healthcare through employer mandates, these recommendations can have a sizeable affect on reducing healthcare costs for individuals which in turn will open the doors for many without coverage.”

To read the paper “Making Markets Work: Five Steps to a Better Health Care System,” visit www.EPIonline.org/MakingMarketsWork