CFCE Blog

New America Response to Hoover Cost Shift Study

By Loren Kaye
Posted 5/29/2007

The New America Foundation has responded to a critical analysis of their "Hidden Tax" study by scholars at the Hoover Institution.

Interestingly, the New America Foundation authors argue that:

"the existence of this "hidden tax" is no longer in dispute; what's under debate is its magnitude, which is hard to measure precisely because it is 'hidden.'"

I am not aware that the existence of the cost shift has ever been under debate.  The extent and magnitude of the hidden tax, and the policy implications of a large or small cost shift, has always been the focus of debate.  It makes all the difference in the world whether the effect on premiums is a ten percent bump or one percent.

But even more important than identifying the existence of a hidden tax, is whether the policy prescriptions for curing it will actually work.  Neither New America, nor any of the other studies it identifies, has taken up that challenge.

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