Doubling Down on a Flawed Insurance Model

"What this plan will do is make the insurance you have work better for you. . . . And here's what you need to know, I will not sign a plan that adds one dime to our deficits--either now or in the future. Period."

So spoke President Barack Obama in his address to Congress earlier this month, for the first time laying out more specific goals for health-care reform. To persuade the American people to support his health reform agenda, the president has made two simple promises. First, his plan will benefit everyone who already has health insurance. Second, his plan will not add to the nation's yawning budget deficit. Both claims are essentially false, and examining them offers economic lessons for reform.

The administration's plan will impose mandates that employers provide coverage, mandates that individuals obtain coverage, and mandates about the form this coverage will have to take. These will remove the freedom to choose one's health-insurance plan, because government, in its effort to correct perceived inequities, will dictate which health-care services must be covered and which health-care providers must be used.

Click here to view the full text of this article from the Wall Street Journal.

R. Glenn Hubbard is an adjunct scholar and a member of AEI's Council of Academic Advisers. Mr. Cogan is a senior fellow at the Hoover Institution and professor of public policy at Stanford University. Mr. Kessler is a professor of business and law at Stanford University and a senior fellow at the Hoover Institution.

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