Charles Krauthammer's Aug. 8 column ("Health-Care Reform: a Better Plan") is disingenuous at best. He starts with crediting a 1986 Reagan tax cut with 20 years of ensuing prosperity. Is there a 20-year statute of limitation on the effect of tax cuts? If it extended just one year longer we could credit Ronald Reagan with the mother of all recessions, which started in 2007. He credits Reagan with Bill Clinton's balanced budgets and surpluses, and the unprecedented job creation during his eight years. If an administration's sphere of influence extends 20 years downstream, don't Kennedy-Johnson get credit for what happened during Reagan's term?
The thrust of his column is health-care reform. We currently spend $2 trillion a year on health care. Estimates are that 1 percent goes for malpractice payments and 9 percent for defensive medical practices, yielding his $200 billion. He proposes saving half of this by tort reform and sending a $5,000 insurance grant to each uninsured poor person. This would cover 20 million. We have 47 million uninsured and over 30 million below the poverty line.
Next he says: "Tax employer-provided health-care benefits and return the money to each employee via government check to buy his own insurance." More clearly stated: All employers would cancel their group plans and give each employee their share of the money saved as taxable income. The government would then return the tax paid on the incremental income to the employee for them to buy their own insurance (not group).
The rest of the developed world spends 50 percent to 60 percent of our $6,738 a person per year for health care. They spend 60 percent to 75 percent of our per-capita cost for drugs. We should have tort reform, but why focus on 10 percent of our problem? Why prevent the government from keeping the insurance companies honest by offering a form of Medicare, only as an option? Does anyone credible believe privatizing Medicare would be cheaper? Why prevent the government from negotiating the cost of drugs that it will pay for with taxes?
Medicare's administrative costs are 3 percent. Drug companies spend 17 percent of revenues for marketing (Viagra), and they use the expense to reduce taxable income; in only one other developed country, New Zealand, are drug companies allowed to advertise.
Mr. Krauthammer's outrage is misplaced.