McCain’s Health Care Proposal

You can read the speech he gave and see his plan here from his website.

For a positive response to the plan, here from Matthew. For an opposite view, here, from Jonathan Cohn in the New Republic.

The center of McCain’s proposal is a $5,000 tax credit to be used for purchasing insurance. As a trade off, he will stop tax credit to businesses that give employees health care. Now I’m on record as favoring an end to the employer based US-system, but this I don’t think is the way to go about it.

The main arguing point politically for McCain with this plan is that it won’t bring in big government paternalistic liberalism, which is what the Democrats will achieve (so he argues).

McCain’s plan, conversely, touts creating a market, innovation in the field of health care, citizens being able to choose for themselves.

Here’s a problem with that outlook:

A big problem with this scheme, as critics like me pointed out, was that it wouldn’t do much for people who were already sick. Insurance companies generally won’t offer coverage directly to people with “pre-existing conditions,” since they represent such bad financial risks. (It turns out people with medical problems need medical care!) So buying insurance on their own really isn’t an option.

$5,000 won’t get you much if you can’t buy insurance because of pre-existing conditions and no government regulation of the industry and you have health costs of say $35,000. So to deal with that issue, McCain has the following proposal:

In a speech at a Florida cancer hospital, McCain acknowledged that people with pre-existing conditions can’t always buy insurance on their own. But, he says, that doesn’t mean these people will be left to twist in the wind. Instead, McCain is offering people like [Elizabeth] Edwards what he calls a “Guaranteed Access Plan.” But unlike all those awful big-government entitlements the Democrats are promising–you know, the ones that (supposedly) make you wait in long lines and cut off access to high-technology treatments–McCain says his plan will let the states handle the problem by working hand-in-hand with private insurers to offer insurance for people with pre-existing conditions.

Cohn writes:

It will be the best of both worlds, McCain promises: Affordable, available insurance, but through private carriers and without the heavy hand of Washington.It all sounds very lovely–unless you know something about health care policy, in which case it sounds absolutely preposterous.

And why is that exactly (bold in original)?

More than 30 states already have programs almost exactly like the one McCain just sketched out. They are called “high risk pools,” and the idea is pretty straightforward: Private insurers agree to sell policies directly to individuals, even those with pre-existing medical conditions, as long as the state helps to subsidize the cost.

But the whole reason conservatives like McCain prefer this approach to liberal schemes for universal coverage is that it involves minimal government regulation. As a result, private insurers have enormous leeway in dictating the terms of coverage. And one place they use that leeway is by setting high prices. A few years ago, a Commonwealth Fund study found that, on average, state high-risk pools offered coverage that was two-thirds more expensive than regularly priced coverage. In some states, the high-risk coverage was actually twice as high as regular coverage.

At those prices, you might think the coverage was spectacular. Not so. While private insurers in high-risk pools are willing to accept people with pre-existing conditions, they’re not generally willing to cover expenses related to those pre-existing conditions–at least not right away. Nearly all the plans surveyed had waiting periods of between six months and a year, during which the insurers would not cover care for prior medical problems.

Read the rest where Cohn takes the case of Elizabeth Edwards (wife of former candidate John Edwards) who has cancer. Her $5,000 tax credit will go a long way to paying her [low end estimate] $14,000/year to [high end] $100,000/year medical care. Of course she’s really rich, so she can get whatever. But for those who aren’t, then what happens?

Not to mention that McCain’s budgetary proposals will massively increase the deficit. Like every Republican since Reagan he will increase the federal budgetary deficit. Reagan, George HW Bush, George W Bush. All of them. Government will massively grow (particularly the national security state/defense industry and national surveillance state/industry) and continue to be as incompetent and not really much in return as the current Republican administration. At least on domestic issues.

I know the Democrats plan will come with increased costs. Their projections are always the best of all possible worlds scenarios and with any of these things (conservatives correct here) it will always be more complicated and expensive than imagined.

But is McCain’s plan really a workable alternative? Really? How long will the US continue to have the highest cost/person of health care and the worst coverage in the post-industrial world? This is massively hampering US economic competition. How is this not an outrage? Oh yeah, there’s an angry black preacher around there’s far more important–I forgot.

Published in: on April 30, 2008 at 9:18 am  Leave a Comment  
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