John McCain’s health insurance plan would probably not significantly lower the number of uninsured in the country, and it is possible under his plan that insurers could re-locate to states with less onerous health care mandates, say experts.
But the same experts claim that Barack Obama’s plan “would require new, large, and rapidly growing federal subsidies that are unlikely to be sustainable, fiscally or politically” and that “job losses or pay cuts would result” from his plan.
I don’t know about you. But I like option A a lot better than option Barack.
But Barack Obama supporters will probably argue that this objective comparison of health care plans fails to consider the fairy dust that Obama would sprinkle over his plan that would make all its pitfalls magically go away.
Economists take critical view of health plans
By KEVIN FREKING, Associated Press Writer Tue Sep 16, 12:12 AM ET
WASHINGTON – John McCain’s health plan won’t lower the ranks of the uninsured. Barack Obama’s fails to curb the soaring cost of health care, meaning initial gains in helping more people buy health insurance would eventually be undermined.
That’s the assessment of health care economists who critiqued the plans of the two presidential candidates.
The critiques, published in the journal Health Affairs on Tuesday, reflect fundamental disagreements over how to improve access to health coverage. They also sound warnings about what could go wrong with each candidate’s plan.
McCain would dramatically reshape the way millions of people get health insurance. The Republican would do away with income tax breaks for health insurance obtained through the work place, instead treating the payments as taxable wages.
In exchange, he would give people a $2,500 tax credit for individuals who buy health insurance and a $5,000 tax credit for families that do so.
The tax credit could help people buy insurance through their employer. Many would also use it buy coverage directly from insurers in the individual market. They could select from insurers licensed in any state. With more competition, costs would fall and quality would increase, McCain reasons.
Analysts writing in the journal warned against that approach.
They said employers would be less likely to offer coverage if they knew their workers could get it elsewhere. In all, the authors projected that 20 million people would lose their employer-sponsored insurance under McCain’s plan, while 21 million people would gain coverage through the individual market — little more than a wash.
And as monthly insurance premiums rise and the tax break stays the same, even that gain would erode.
Another concern is that insurers would gravitate to states with less onerous coverage requirements. For example, 29 states insist insurers in the individual and small group market cover cervical cancer screenings. They could locate in states without such requirements.
Obama wants the government to subsidize the cost of health coverage for millions who otherwise would have trouble affording it on their own.
The Democrat would set up a kind of government-run shopping mall that would negotiate prices and benefits with private insurers. One choice would be a government-run plan. No participating company could turn someone away because of pre-existing cancer, heart disease or diabetes. Nor would someone have to pay a higher monthly premium based on those conditions.
The government would subsidize the cost for many who buy coverage through this exchange. But analysts say using third parties to subsidize the cost of a product exacerbates health inflation. Consumers and providers act as if any service that might yield some value should be covered. After all, it’s largely somebody else who is picking up the tab.
“Any major expansion of coverage will be costly, and the Obama promise of affordability would require new, large, and rapidly growing federal subsidies that are unlikely to be sustainable, fiscally or politically,” said the authors.
Obama would also require all but small businesses to make a “meaningful” payment for health coverage of their workers or contribute a percentage of payroll toward the cost of the public plan offered through the exchange. The authors said that either way, job losses or pay cuts would result.
The journal subjected the plans to a sort of devil’s advocate analysis. Once the unsolicited review of McCain’s plan was reviewed and accepted, the journal sought out economists who would take a similarly tough look at the Obama plan. The reviewers of the Obama plan included Gail Wilensky, an unpaid adviser to the McCain campaign.
Personally, I would like to see a health care plan that provided businesses with tax incentives to provide coverage for employees and their families, and have health coverage that could not be cut off if a worker lost his job (provided he or she continued to pay the same premiums as the employer had paid). In other words, just because you are no longer working for a particular employer does not mean you should lose your medical coverage.
In my view, the two biggest problems with health care are 1) soaring costs and 2) transferability.
Socialized medicine has failed everywhere it’s been tried, and the larger the population, the more horrendous the failure. It invariably results in long waits and rationing of care. But the privatized system we have now – which historically depends upon employers to pick up the tab – fails to provide suitable controls to limit the skyrocketing costs (i.e., since you are not paying for your own health care, there is no incentive to keep the costs of your health care down).
John McCain’s plan imperfectly tries to deal with these two fundamental problems with our current system by attempting to sever the unhealthy relationship between employees, employers, and health care. But even though it is ultimately inadequate, it is a FAR cry better than the Obama plan which would send costs soaring and result in a loss of jobs as employers are forced to cut costs.