"Neither candidate fully addresses all of the issues and problems regarding health care," says Hamilton College economics professor Stephen Wu. "Senator Kerry's plan is more ambitious and will likely lead to more individuals gaining a source of affordable health insurance, but at a higher cost.
"Kerry likely underestimates the true cost of coverage, especially when these government sponsored health insurance plans are voluntary. Adverse selection, the fact that the sickest individuals will join, make that pool of insured individuals more expensive to cover than a random sample," says Wu. "Kerry's idea of the government as a reinsurer is one that policymakers have proposed for a while and is a shrewd move. This will eliminate the insurance companies' worry of taking in a few catastrophic patients and will allow companies to lower
premiums.
"Bush's plan seems insufficient to address the number of uninsured. In theory, tax credits can be a step in the right direction, but the marginal effect of these credits on actual behavior is an empirical question. These credits would need to be more significant than he is proposing for there to be any real contribution to the uninsured," Wu said.
Wu's research focuses on health economics and the economics of aging. He is currently doing research on the relationships between health status, wealth accumulation and portfolio decisions, as well as the decision to purchase private health insurance.
Contact Wu: 315-859-4645, swu@hamilton.edu
