Here is my take on the candidate’s health plans. I’ll make it short and sweet for you. Barack Obama’s health plan give more bang for the buck and covers more people than John McCain’s plan. McCain’s “market-based” plan will dangerously leave more Americans without health care or less coverage. And, I believe that Obama’s plan will also be easier to put into place.
Part 1: More bang for the buck & covers more people:
Senators John McCain and Barack Obama have presented very different plans to reform health care in the United States. Last week, the Urban Institute/Brookings Institution Tax Policy Center (TPC) provided what appears to be the first evaluation of each plan’s effect on costs and coverage outcomes. While the TPC findings are preliminary, there is a wealth of information contained in them; some of their implications, however, may not be immediately apparent even to those relatively well-versed in the U.S. health care debates. The punch lines of the TPC analysis can be stated relatively simply:
* Efficiency. Over the 10-year period analyzed by the TPC, Senator Obama’s plan provides far greater “bang-for-the-buck,” spending far less per capita for its coverage of the uninsured population.
* Cost. The costs of the plans over the 10-year period are in the same ballpark: the Obama plan costs roughly $1.6 trillion, while the McCain plan costs $1.3 trillion.
* Coverage. The Obama plan makes a much bigger dent in covering the uninsured population. On average over the 10-year period, the Obama plan covers over 47% of the forecasted uninsured population, while the McCain plan covers less than 5%.
–Economic Policy Institute Policy Memorandum #126 “Obama health plan outperforms McCain plan in coverage and efficiency”, May 23, 2008
Are you kidding me? $1.6 trillion to cover 47% of the uninsured versus $1.3 trillion to cover less than 5%?
Part 2: John McCain’s “Market-based” health care
If John McCain’s plan went into place, there would be no incentives for employers to cover their employees. We’d all be tossed out to find our own plans. This is where we will find out what a cold lonely place the free market is and why we should never be put into this position when it comes to something this important.
First, some workers—likely those who are young and healthy—will decide to decline their employer’s insurance to seek out plans in the individual market. The remaining workers in the ESI pool will thus have higher average health costs, causing their premiums to rise. When premiums rise, other workers may leave the pool, worsening the problem.
Second, employers may decide to stop offering insurance as it becomes more expensive and less valuable to their entire workforces. Additionally, small employers who were offering insurance to their workers to gain the tax advantage themselves will no longer see a benefit to offering and might stop sponsoring coverage.
Some of the people who lose coverage through their employer will simply lose coverage altogether. The individual market subjects individuals to the whims of the insurance industry: poor information about policies, discriminatory pricing, coverage waivers, refusal to pay for pre-existing conditions, and denial of policy renewal. To make matters worse, other parts of the McCain plan remove many of the (already insufficient) consumer protections that currently exist in state regulations—such as mental-health parity and “guaranteed issue” (the requirement that insurance companies offer insurance to all comers).
–Economic Policy Institute Policy Memorandum #126 “Obama health plan outperforms McCain plan in coverage and efficiency”, May 23, 2008
Another dangerous part of John McCain’s plan is that he would like to “open up the health insurance market to more vigorous nationwide competition”. Sounds great. More competition = cheaper rates, right?
Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.
– “Better Health Care at Lower Cost for Every American” by John McCain, in Sept/Oct 2008 issue of Contingencies magazine
Yup. Just this last week, I’ve been noticing the results of what less regulation has brought about in the last decade to Wall Street. People having their retirement nest eggs wiped out by the choices the Wall Street executives have made while they escape away on their billion dollar golden parachutes. Do we really want that in health care?
Elizabeth Edwards spoke about what less regulation has done in the credit card industry in an article for the August issue of Sojourners:
Another danger of the individual market approach is that, just as the gold speculators of the Wild West clustered in the most profitable locations, insurance companies would be free to cluster in whatever states offered them the loosest regulations. This is exactly why the credit card companies are mostly located in either Delaware or South Dakota—and we know how well this has turned out in recent years.
Here’s how it happened. In 1978, the Supreme Court ruled that banks must follow the regulations of their home states, including the laws governing interest rates. South Dakota, sensing an opportunity, lifted its interest rate cap altogether, and Delaware followed suit shortly thereafter. Credit card companies flocked to those states, because then they were allowed to advertise and sell cards to people in New York that were governed by the far looser laws of South Dakota or Delaware.
Today, insurance companies are required to follow the laws of the states where their plans are sold, not just the laws of the states where their companies are based. However, conservatives are proposing to change that and allow insurers to choose the state laws they want to be regulated by. The companies wouldn’t even have to move to that state—they could simply file paperwork there, and voila! they get to operate under looser regulations.
And, unless she had ESP, she had no idea that Wall Street was about to come close to a Great Depression collapse last week requiring the biggest government bailout in history. I do not want my health care subject to the whims of more executives trying to make the best decisions for their own pocketbooks.
It gets worse. Unlike Barack Obama’s plan, John McCain’s would let insurance companies “cherry-pick” the youngest and healthiest people and then refuse to take anyone with pre-existing conditions. People like my dad.
Not only that, but John McCain’s proposed yearly tax credit of up to $5,000 for a family is nowhere near the average cost of $12,100 for a family of four. How will families struggling to make ends meet afford to pay for that? That’s nearly an extra $600 a month.
Part 3: More likely to put into place:
The way the individual races are going, it is extremely likely that the Democrats will be in control of both houses in Congress. I would hope that a president in the same party will have an easier time working with Congress to get this much-needed legislation passed.
I also believe that, since Barack Obama’s plan builds on our existing setup of employer-sponsored health care and public insurance, it will be an easier choice than to drastically change the tax code like John McCain’s plan would. I could be wrong. HealthCare.com lists several difficult challenges faced by both candidates.
So, dear readers, please read up and make your own determinations about what you would like to see enacted by the next president. Remember that you are voting for yourself and for the whole of society. But more on that in my next post. 
