EDITORIAL - A win-win approach to financing health care reform

[Guest guest]

Volume 361:4-5 July 2, 2009 Number 1

A Win–Win Approach to Financing Health Care Reform

Gruber, Ph.D.

No hurdle facing health care reform in the United States today is more

daunting than the problem of financing universal coverage. There is an

inescapable logic of reform that lies behind the search for financing

sources. First, moving to universal coverage is now widely

acknowledged to require a mandate that individuals carry insurance

coverage. Second, such a requirement is unacceptable without subsidies

to make health insurance affordable for lower-income people. Third,

these subsidies will require new financing on the order of $1 trillion

or more over the next decade. How can the government finance such a

sizeable new expenditure?

There are a number of possible sources. One is reductions in existing

government spending on health care through cost controls. President

Barack Obama proposed more than $300 billion of such cost controls in

his budget, but it is not clear that either politicians or providers

have the appetite to go further. Another is increased taxation of " sin

goods " — cigarettes, alcohol, and high-sugar or high-fat foods that

cause obesity — whose use raises the cost of health care for all

Americans. These taxes make sense, yet it is difficult to raise

sufficient revenues from them. The government can also look outside

the health care system to increased revenues from taxes on carbon

emissions or on other goods and services. But this approach would

involve expanding the fight over health care into other realms,

compounding the difficulty of passing any legislation.

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Read the full editorial here:

http://content.nejm.org/cgi/content/full/361/1/4?query=TOC

Not an MD