McCain-care leaves much to be desired

April 30, 2008

After John McCain unveiled more details on his healthcare plan yesterday in Tampa, the Politico ran this headline: “McCain moves to middle on health care.” Given that any policy proposal aiming for the “middle” is perceived as moderate and sensible, the spin on McCain’s plan was obviously positive.

But spin aside, the policy itself leaves much to be desired.

Senator John McCain detailed his plan to solve the nation’s health care crisis in a speech here Tuesday, calling for the federal government to give some money to states to help them cover people with illnesses who have been denied health insurance.

Mr. McCain’s health care plan would shift the emphasis from insurance provided by employers to insurance bought by individuals, to foster competition and drive down prices. To do so he is calling for eliminating the tax breaks that currently encourage employers to provide health insurance for their workers, and replacing them with $5,000 tax credits for families to buy their own insurance.

His proposal to move away from employer-based coverage was similar to one that President Bush pushed for last year, to little effect. And his call for expanding coverage through market-based competition is in stark contrast to the Democrats’ proposals to move toward universal health care coverage, with government subsidies to help lower-income people afford their premiums.

The good news is, the contrast between McCain’s approach and the Democrats’ approach couldn’t be greater. For voters concerned about healthcare, there’s a clear and distinct choice.

The bad news is, McCain’s plan is pretty awful, and probably won’t receive much in the way of scrutiny.

About a week ago, McCain, sensitive to criticism he’s received from Elizabeth Edwards (among others), told George Stephanopoulos, “We’re not leaving anybody behind.”

The problem, not surprisingly, is that he’s leaving all kinds of people behind. TNR’s Jonathan Cohn took a close look at McCain’s proposal and concluded, “His great new plan isn’t new or great. And it still wouldn’t help Elizabeth Edwards get decent insurance.” After reviewing McCain’s patchwork solution for people who can’t get insurance due to pre-existing conditions, Cohn added that McCain’s approach is “absolutely preposterous.”

Cohn concluded:

Come to think of it, why should we even believe McCain takes this issue seriously? His Democratic counterparts, Hillary Clinton and Barack Obama, issued detailed policy proposals more than six months ago — with pages of analysis and explanation, right down to the budget dollars. Those details were a sign of commitment and, on a more practical level, their constant hyping of them represent an investment of political capital.

By contrast, even today’s announcement from the McCain campaign–which was supposed to help fill in the many blanks left before — came with only minimal detail and supporting evidence. The actual proposals are still vague, consisting mostly of bland vows to “work with governors” and make sure premiums for people with pre-existing conditions are “reasonable.” And while health care is the campaign’s focus this week, it’s never occupied the place in his agenda that it does in the Democrats’.

Quite right. The NYT report on McCain’s presentation yesterday explained, “Mr. McCain’s speech here implicitly acknowledged some of the shortcomings of his free-market approach. But rather than force insurers to stop cherry-picking the healthiest — and least expensive — patients, Mr. McCain proposed that the federal government work with states to cover those who cannot find insurance on the open market.”

What does “work with” mean? No one has any idea.

Just to add one thing to Cohn’s analysis, there’s also the not-inconsequential matter of affordability. McCain wants to discourage employers from offering employees healthcare, and replace subsidies with $5,000 tax credits. In turn, Americans could go and get their own insurance, detached from their job. (That is, unless you’ve ever been sick, and private insurers don’t want you.)

What McCain didn’t mention is that “average cost of an employer-funded insurance plan is $12,106 for a family, according to the Kaiser Family Foundation, a health policy group. Paul B. Ginsburg, the president of the Center for Studying Health System Change, a nonpartisan research organization financed by foundations and government agencies, said, ‘For a lot of people, the tax credits he’s talking about would not be enough to afford coverage.'”

Hilzoy summarized the situation nicely:

So, in a nutshell: McCain plans to eliminate tax breaks for employers who offer health insurance. In exchange, he will offer employees less than half the cost of the plans they now have. If their employers eliminate care, they will have to swallow the difference. But those employees are the lucky ones. They will only have to cough up $7,000 or so. People with preexisting conditions or serious health risks will have to pay $100,000 as a down payment, and $14,000 a year thereafter.

But hey: at least he’s going to cut the gas tax! […]

It’s easy to make health policy when you don’t allow little things like facts to constrain you: when you can wish away chronic diseases, pretend that corporations are completely unresponsive to changes in the tax structure, and describe programs that leave people with hundreds of thousands of dollars in health care costs as “making sure that they get the high-quality coverage they need.” It’s just not particularly helpful. Plus, it would be even better with ponies.

As McCain “moved to the middle” of the road on healthcare? Only if the “middle” is the area in which bad policy proposals get run over.

I think I should refer my conservative friend to this page. After all, yesterday, he claimed with a fairly strong tone of seriousness, that the Democrats were merely an opposition party to the Republicans, and didn’t offer any ideas of their own.

And no, the media isn’t likely to really do the dirty work here. After all, it’s not a significant matter, like the comments some unimportant preacher made years ago. It only concerns health care. That said, if we remind the public of this day in and day out, perhaps it and the media will take notice.

  • Leave it to a ReThug to propose a health care plan that would screw him over if he were a regular citizen. Has anyone calculated how much McCaniac would have to pay if he weren’t receiving socialized medicine?

  • Benen is correct to highlight the “Work with” comment. Republicans have a long history of talking about “working with” people. Bush was going to “work with Democrats on any number of issues. “No child left behind” was supposed to “work with” states to improve standards, etc etc…

  • Mccain’s plans makes sense in a certain sort of context.

    Like, if he were an old-tyme silent movie villain. Top hat, black cape, twirly pencil-thin mustache, wringing his hands, throwing his head up to cackle maniacally, screwing the poor because he can…

    yeah…NOW it makes sense.

  • I’m currently on COBRA, single person (under US law, married under Canadian), and $400/mo premiums, just under his proposed $5k tax “credit”. If that credit is like the others, it would reduce taxable income by up to that amount, and the actual out-of-pocket savings would not be more than a couple of hundred dollars per year. I’d still be paying those monthly premiums, but maybe get a slightly bigger refund at the end of the year.

    What a joke.

  • TPM had a great take: “McCain reintroduces Bush health care plan in effort to show he’s his own man.”

  • So if the employers currently “pay” $12,106 per family, how much can we expect the employee’s wages to increase when they drop the coverage? One needs to consider the tax advantage garnered by the employer and subtract that.

    I won’t pretend to know the answer to this question, but it does seem like it should be factored in. The other thing is: if we included minimum coverage standards, and an expanded (and refundable) tax credit, this could be vary close to a single payer system, no?

  • Is there any problem that a tax cut or tax credit can’t fix?

    This is good for us– his plan proves that he doens’t have a clue what the actual problem is or has any idea how ordinary people live.

    I don’t care who gets the nom anymore– it’s going to be fun watching either one of them take down someone so completely clueless.

  • When someone gets around to calculating the costs of McCain’s plan, they need to consider a few things:
    1) Many young healthy people will flock to cheap plans that won’t cover them if “walking 30 minutes a day” doesn’t have the desired result. They then become bankrupt, creating a ripple effect.
    2) Fewer people will have access to comprehensive coverage at reasonable costs, and comprehensive coverage costs will go up as a result. Therefore, more people will have to join the young healthy people in item 1 with the same results.
    3) There will be more indigent patients, the cost of whom will be passed along to someone.
    4) More people will get late diagnoses, resulting in higher costs.
    5) Diseases will spread more easily, as people turn to “alternative” (read unscientific) medicine.
    6) More people miss work, or become less productive, exasperating an already unfair trade competition.
    7) Large companies will have an even greater advantage over smaller ones, because they will have bargaining power. This results in lower pay and lower tax revenues because of less competition.

    But then, this is what Republicans call “personal responsibility.”

    Oh, and Michael W (5): Single people only get $2500.

  • Yeah, is the $5K an amount that your taxes are reduced by, or is it just that you can exclude $5K from taxation? If the latter this is REALLY weak tea.

    I have what would be considered a pre-existing condition, and can only get insurance by having my LLC (I’m self-employed) buy “group” insurance. Sounds like McCain wants to take away that option from me, and as a consolation offer me a few hundred bucks tax credit for the insurance I will no longer be able to get. I’d call it a joke except it isn’t funny.

    It’s up to Obama to point out how bad McCain’s proposal is, since the media are too busy fluffing their favorite son. If Hillary would get out of Obama’s face then maybe he could start doing it.

  • jimBOB (10): According to McCain, you tell the government who your insurance is with and they send the money directly to that company. It’s not actually a tax cut.

  • All his plan needs is an appropriate nickname– McCain’s Screw-You-You’re-On-Your-Own health care plan. Not catchy or short enough, but you get my drift.

    Other suggestions?

  • “Mr. McCain’s health care plan would shift the emphasis from insurance provided by employers to insurance bought by individuals, to foster competition and drive down prices.” (NY Times)

    Yeah, that’ll work.

    And then consumers can save even more money if the negotiate directly with Procter and Gamble to buy their next bottle of Mr. Clean rather than buying it at their favorite grocery store.

    Does McCain have the slightest idea how things work in the real world?

    My mother-in-law is 85 and has the initial stage of Alzheimer’s. She has moments where she gets confused and she forgets some short-term memories. When McCain gets confused and can’t remember the difference between Sunnis and Shi’a, he looks exactly like what my mother-in-law during one of her spells of dementia.

  • As usual, Democrats seem to revel in discussing wonky details rather than reducing the issue down to a sound bite so the people who care about flag pins and the Pledge of Allegiance will pay attention.

    Republicans say the issue is whether government bureaucrats or family doctors will decide Americans’ medical care.

    Bullshit!

    The issue today is whether a family’s medical decisions are made by a corporate drone (who is using rules written by CEOs whose stock shares increase every time the company refuses to cover a claim), or a government bureaucrat (who answers to politicians who respond to public pressure). Marcus Welby hasn’t been in the decision-making loop for years.

  • There’s another aspect of McCain’s plan which also doesn’t hold up to scrutiny. For quite a while he’s made vague talk about changing how Medicare pays. He’s never given specifics but it sounds like he wants to change it to a more capitated system instead of paying for individual services. Such systems might work (but have often failed) when dealing with young, healthy patient populations. They have been a disaster when attempted with sick patient populations such as with Medicare.

    This could bring many of the worst horrors of HMO’s to Medicare. Most Medicare patients are not going to want to see their plans radically changed. Democrats might be able to use this to their advantage in going after the senior vote.

  • I think I should refer my conservative friend to this page. PLEASE DON’T! We just lost the Hillary freaks and don’t need McSame freaks.

  • jhm (#7) said: So if the employers currently “pay” $12,106 per family, how much can we expect the employee’s wages to increase when they drop the coverage? One needs to consider the tax advantage garnered by the employer and subtract that.

    IF something like this were to be adopted, and I am holding my breath that the dems don’t completely self-destruct to make this happen, you might get an initial boost in salary (I’ll be generous here and say $5k a year for an average person, probably more so for an exec. There is no way businesses are going to boost your salary by $12k.) You will probably get bumped up to a higher bracket reducing that amount further. But let’s say that year one might be peachy and all is fantastic. Our healthcare has gone up in double digits annually. Does anyone think that their employer is going to give ongoing annual double digit salary increases?

    The only time I saw double digit salary increases was:

    1) Twenty years ago when I first started with a company and we got two reviews and increases annually. Mine was 12% that first year (6% was the max, I also got 6% for the next half year installment. They then went to single annual reviews and increases and I continued to get 6% – the max – until they stated going COLA and the increases reduced even further. So, while I was still getting superior reviews, my increases were now at 3%. It was never in double digits again.)

    2) When I left that company and went to another.

    The companies are not going to dole out that kind of money to its employees when that money would be better “spent” to bolster its bottom line. You will hear the same things you hear now; cost cutting, sales down, whatever. There is no way a company will keep up with the private market of healthcare.

    And then there is the eat, get gas, get medicine or pay for that insurance that you really can’t afford anyway, especially if you are younger and healthier. And once you opt to not get it, you will probably be penalized by not being able to for X period of time or at truly outrageous costs (similar to how auto insurance works if you have a gap in your coverage).

    There is NOTHING good about this plan. Even for the private insurers it’s not good because they will lose the automatic revenue from their corporate clients and be forced to deal with consumers directly. And anything that reduces that double digit CEO bonuses (in millions or billions, that is) would be a very bad thing.

  • The proposal is fraught with possible unintended consequences. As noted, companies get a break. Instead of a $12,000 neutral deduction, which actually costs them $9000 (they avoid $3000 tax at 25%), they get $9000 profit. They can fire most of their Human Resources staff, most of whom handle health care.

    We, the taxpayer, get to spend $5000, get some fraction of it back, then has to deal personally, as opposed to a trained HR staff, with the insurance companies. We are supposed to shop in order to get the low rates. Imagine the time the average citizen would spend dealing with this. Imagine how the insurance companies would grin imaging having to deal with the rubes, instead of professionals.

    And what about all the existing state based systems? What about the federal government’s sytem? Will McCain seek to abandon health care for himself and other federal employees for the $5000 tax break? If not, why not?..this is fiscally responsible. The new system will cost much less than existing federal and state programs and help him pay for his tax cuts..

    Yes I know, that last paragraph is pure fantasy…forgive me.

  • I’m not sure which part of the plan is more appalling – it’s implementation, or the level of ignorance it displays. I’m going to say it’s even.

    The average family plan, from what I can tell, costs 12K to 24K on average depending on the level of pre-existing conditions. Sure we get a 5K tax break and our pay-in to the company’s insurance can go to our insurance – but either way, people end up paying more – and still have to face all the deductables, copays, etc. they’d face anyway.

    End result – nothing changes and I pay more money, maybe a lot more if I ever get, say cancer (like, say, John McCain). I’m sicker, poorer, or both. Even if I’m rich as Croseus, it still means millions of other people suffer.

    So why am I supposed to support this?

    Oh, right. Because Jerimiah Wright damns all our flag pins.

  • And remember he also said he’d help states address their citizens who couldn’t get private insurance. Well hell, states can’t even insure every healthy uninsured child. How are they supposed to be able to afford to help insure unhealthy uninsurable adults? Public hospitals are already closing at alarming rates, public health clinics are already overwhelmed.

    As someone said above “McCain Health Care Plan: 1 Bullet, or 2?”

  • McCain is simply not credible when it comes to healthcare becuase he’s never had to deal with it and won’t bother to learn anything about it either…

    AS he loves to mention, he’s an Admiral’s son, so he had military healthcare growing up, he joined the Navy, then retired from there, then became a Senator.

    So he’s always had Socialized medicine… what would he know about the “free market” for healthcare??

  • The irony here is that the military medical system (including the VA) is the closest system we have to socialized medicine to the US. So McCain wants to keep the high-quality, low-cost system for himself, and consign all the rest of us wretches to the tender mercies of the individual system, which is notorious for high premiums and little or no coverage, particularly for those with pre-existing conditions. How very Republican.

  • Just playing off of what was hinted to above, someone should ask him if Congress would be giving up their program to join his at the same time? If not why not?

  • McCain’s Screw-You-You’re-On-Your-Own health care plan.

    Fits right in with the Republican “Screw-You-You’re-On-Your-Own” Social Security privatization plan, and their Empty-Promises-and-Hot-Air / Raid-The-Company Pension Plan .

  • Our company went from a plan with an $1100 deductible this year to one with a $3500 deductible plus we get to pay co-payments on care and prescriptions up to another $1000. I make very good money, but when I read that memo, I wept. I’m a diabetic and my drugs cost me over $800 a month. Just think if I had to pay premiums too…

    The drug costs are ridiculous. One medication costs me $200 a month. Rarely do they treat diabetics without a combination of drugs. I could own my own jet for premiums monthly drug costs, physician fees, dentists, eye glasses, etc. under the Republican plan. Who can afford $2500+ a month, which a person with a chronic illness would have to pay? Think about it.

    I’m being more than a little cynical when I say that Republicans would rather that the poor and ill among us just die off. Then the cost of social security and medicare would go way down too, not to mention disability for those who need that! And the added bonus is that it will probably affect people of color more, so we can have that white country back! What a plan!

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