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1 Arthur P. Hall, The Clinton Administration's Health Care Reform Plan: A Taxpayer Perspective 1 (1994)

handle is hein.taxfoundation/srdcxz0001 and id is 1 raw text is: TAXft FOUNDATION April 1994 Number 32 The Clinton Administration's Health Care Reform Plan: A Taxpayer Perspective The Clinton administration has presented the American people with a sweeping health care reform plan. However, the general approach and ultimate goals of the plan are not new to the United States. Serious discussion of compulsory national health insurance began to take place in the second decade of this century. By the end of Figure 1 Share of Total US. Health-Related Expenditures Paid for through Taxes 100% 90% 80% 70% 60% 50% 1965 1975 1985 1995e 2000e Source: Tax t oundation; Health (are Financing Administration, (ongressional Budget Office. World War I, suggestions had been made for comprehensive, tax-financed health insurance coverage. The issue was revived during the early 1930s when many people argued that any national health insurance program should be federally-administered and compulsory. The concept was revisited periodically during the administrations of Franklin D. Roosevelt and Harry S. Truman. However, no legislative action was taken. Nevertheless, for several decades the federal government has conducted a wide variety of programs dealing with specific medical problems and providing health care for certain groups. This role expanded significantly in 1965 when two broadly-based programsIMedicare and Medicaid-were created to assist the aged and the poor. Proponents felt that these two groups had inadequate private health insurance and that out-of-pocket costs deterred them from seeking medical care. The Current Health Care Financing System In 1965, the year in which Medicare and Medicaid became law, taxes financed about 23 percent of total health care spending in the United States. That figure has escalated to almost 47 percent today. The Clinton administration's health care plan would propel the figure to almost 80 percent by the year 2000. This means that, by the year 2000, only 20 percent of health care financing decisions would remain in private hands. (See Figure 1.) The burden of financing the increased government health care spending, like private health care spending, falls on individual citizens. Tables 1 and 5 show estimates of how Americans finance health care services in By Arthur P. Hall, Ph.D. Senior Economist Tax Foundation _j

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