Obamacare Will Cost More, Not Less

Dr. Arthur Laffer, the famous guru of supply-side economics, voted for Bill Clinton for president in 1992 and 1996. Laffer moved from San Diego to Tennessee because the Volunteer State lacks an income tax. ~~ SR

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by Forrest Jones | Newsmax.com | August 5, 2009

President Barack Obama's healthcare reforms will jack up costs because people will demand more services and pay less for them, says Reagan adviser and economist Arthur B. Laffer.

“When healthcare is subsidized, no one should be surprised that people demand more of it and that the costs to produce it increase. Mr. Obama’s healthcare plan does nothing to address the gap between the price paid and the price received,” Laffer wrote in a Wall Street Journal column.

“Instead, it’s like a negative tax: Costs rise and people demand more than they need.”

To pay for the increased healthcare costs, the administration will boost taxes on businesses as well as the rich.

That will result in more layoffs while patients demand more medical services they don't need because they won't have to pay for them, Laffer says.

As an alternative, Laffer suggests, the country should focus on “patient-centered” healthcare plans such as heath savings accounts. Such high-deductible policies take money pre-tax from patients’ paychecks and place them in bank accounts to pay healthcare costs.

The debate to overhaul the nation's healthcare system has split the country into two camps, according to a CNN poll.

Half of those surveyed in a CNN/Opinion Research Corporation said they supported the president's plans to revamp the nation's healthcare systems, with 45 percent opposed.

“Obama's plan is most popular among younger Americans and least popular among senior citizens,” said CNN polling director Keating Holland.

“A majority of Americans over the age of 50 oppose Obama's plan; a majority of those under 50 support it.”