Study: Health Care Reform Could Prove Costly To Virginians

Every man, woman and child in Virginia would pay $275 for the state's share of the health care reforms favored by the presidential administration, according to a new study from the Virginia Institute for Public Policy, a nonprofit dedicated to free-market principles.

The report, "The Prognosis for National Health Insurance: A Virginia Perspective," is being released today at an 11 a.m. press conference in downtown Richmond. In it, authors looked at the after-effects of federal health care reform that included four key provisions: a public health insurance system, mandated minimum coverage and pre-existing coverage, and the required purchase of medical insurance. Nationally, these reforms would add an estimated $256 billion to the federal deficit by 2019, and reduce economic growth by almost 5 percent, according to the study.

"Our analysis has shown that reform in the [President Barack] Obama manner would render Virginia residents poorer and their state government ... sorely pressed for revenues," the report finds. "Virginia would see reduced economic growth in 2019 by 4.5 percent."

Why? One reason is much of the federal requirements for health care would be pushed onto the states to fund, report authors say, and that means states would have to find ways to raise the money, either by budget cuts or tax increases.

"Reformers must ensure that changes to help the 15 percent of Americans who do not have insurance coverage do not make the vast majority of Americans worse off," the report states.

Such reforms, the study suggests, should include a tightening of tort liability laws to keep medical costs affordable; a reduction in coverage that insurance companies are required to offer and a shift in policy that allows consumers to instead pick which benefits they want; and a law that allows individuals, rather than companies, to own their insurance policies.

The study was researched and written by Arthur Laffer, Donna Arduin and Wayne Winegarden. Laffer, an economic advisor to President Ronald Reagan, is also informally dubbed the "father of supply-side economics." Arduin provides fiscal and economic advice to governors, legislators and think tanks and is a partner with Winegarden, who in turn manages Arduin, Laffer & Moore Econometrics, a company that advises clients on how government policy and regulatory change affects the business climate.

The report's release and accompanying press conference come at the same time Congress is returning to session to continue consideration of national health care reform.

Staff writer Cheryl Chumley can be reached at 703-670-1907.