McCain never talks much about his health care plan. Probably because it's not an issue the republicans fare well on, while it is a core Democratic issue. Maybe also because his plan doesn't really offer much to take on the critical issues in American health care today. He's got a plan, because it's sort of obligatory to have one, but it's just not an important issue to him or a core part of his campaign to be elected. (Which is unfortunate for him, because health care still ranks highly on the list of voters' concerns.) But there's been a lot of talk recently about the McCain health plan, after the journal Health Affairs published a review of the estimated impact of the plan. My take home points from the wider discussion are these:
- This is an incredibly risky scheme. For the past 60 years, healthcare in this country has been financed through employers. While this is a poor system at best, McCain's plan to tax healthcare benefits as income will radically change that. McCain's plan is to replace this system with: nothing at all, tossing 20 million consumers into the private insurance market to sink or swim on their own.
- This scheme places consumers' health at risk. The cross-state marketing of insurance means that insurers will domicile in states with the least protections and safeguards for consumers.
- This represents a hidden tax increase on consumers. Yes, there is a tax credit of $5,000 per family, but with a family premium costing upwards of $11,000 annually, it is not hard to see that most families will wind up paying more out of pocket, and paying more in taxes. (Some analysts differ on this point.) And for those employers who continue to offer health care as a benefit, it represents a massive payroll tax increase, making job creation more difficult.
- Roughly 20 million consumers would be forced into the private insurance market, which typically features higher premiums, higher deductibles and lower benefits.
- Patients with pre-existing conditions would be commercially uninsurable and no viable market exists to cover them, neither now or in the McCain plan.
- More people are estimated to become uninsured under this plan, which also does nothing to remedy the 45 million who are currently uninsured.
“The McCain plan would shift coverage toward the nongroup market, lead to reductions in the comprehensiveness of coverage in that market through deregulation, and encourage employer-based coverage to become less generous as well. These changes would have the effect of shifting costs from insurance premiums toward out-of-pocket payments, and people with chronic or acute illnesses would likely incur much higher out-of-pocket health care costs than they do now. [...] The McCain plan will force millions of Americans into the weakest segment of the private insurance system — the nongroup market — where cost-sharing is high, covered services are limited and people will lose access to benefits they have now. [...] These changes would diminish the security of coverage for most Americans, especially those who are not--or someday will not be--in perfect health."While this sounds somewhat dystopian, understand that for conservatives, it is the intent of the plan! It's a feature, not a bug! The right wing believes that Americans simply use too much healthcare, and the solution is to make insurance more expensive and less generous, and to increase the cost for patients.
Health Affairs also has a skeptical critique of the Obama plan. I was a little disturbed by the fact that two of the three authors of this review have significant conflicts of interest, whereas the McCain authors are, as best I can tell, standard-issue academicians. So there was some ideological bias in the review, IMHO, but it was not a hack job. The key point, I think, is valid: Obama's plan does not control spending. Perhaps I am cynical, but since this plan was posited pre-election, I am not surprised that Obama chose to elide over the difficult decisions and cuts that might become necessary to control costs -- the electoral success record of politicians who promise tax hikes and benefit cuts is not so good. Ezra said it well: "The quiet assumption of the plan, however, is that the steady march of health inflation ensures that, eventually, cost control will be introduced into the equation."
What is given short shrift in this analysis, are some of the key advantages of the Obama plan:
- It creates a market for small business (like mine!) to purchase affordable coverage for their employees.
- It allows individuals who wish to keep their existing coverage to do so.
- While not universal, it would bring 15-30 million of the uninsured into some degree of coverage.
- It reforms the insurance industry so that those with health problems are not discriminated against.
It's a pity that we never got a chance to do this in 2000, before the republicans bankrupted the federal government.