John McCain's Health Care Proposal
John McCain has offered a proposal for changing and improving the health care system in the United States. Below I will attempt to provide you with highlights of the health care plan as well as share several analyst's opinion on the plan.
Highlights of the Health Care Proposal
John McCain's health care proposal seeks to change the focus of health care from the current "employer" coverage to more individual insurance policies.
All About Health Insurance Premiums
- Employers would no longer receive tax breaks for paying health insurance premiums for their employees.
- Individuals would receive a tax credit of $2500.00 for individuals and $5000.00 for families to offset the cost of health insurance. This money would be sent directly to the insurance provider. Any left over money could be deposited in a Health Savings Account.
- For individuals receiving health insurance through their employers, the amount of the premiums will be listed as income and will be taxed as income.
Choice of Health Insurance Companies
- Health insurance companies would be able to sell insurance across state lines, allowing individuals to have more of a choice of health insurance companies and plans.
- State mandated conditions of health insurance policies would cease to exist, with a federal, country-wide policy form.
- National health insurance products could compete on the national as well as the state level, and vice versa.
- Individuals would be able to purchase health insurance through and organization or association, through their employer or direct from an insurance company.
Increasing Choices on Where to Get Medical Care
- Having walk-in clinics in retail outlets to provide more access to medical care.
- Allow for the re-importation of drugs from other countries.
- Quicker availability of generic forms of medication.
- For medicare, revamping the system to provide a bundled payment program to providers. This system pays or the diagnosis, prevention and care of a treatment plan rather than paying for each treatment given.
Allowing Doctors to Practice More Freely
- Let doctors practice across state lines rather than being restricted by licensing that only allow them to practice in specific places.
Medical Liability Reform
- Placing a cap on the amount of damages a patient can receive in a medical malpractice suit.
- Disallowing lawsuits against doctors that have followed medical and safety protocols.
- Veterans would receive an electronic health care card so they can receive health care anyplace they want.
- People who receive health insurance through their employer or through group coverage would still be covered for pre-existing conditions
- HIPAA (Health Insurance Portability and Accountability Act) would remain in effect to allow some people the ability to continue coverage after the loss of a job.
- Federal government would work with states to provide insurance to those with pre-existing conditions through state insurance programs.
Analysis of John McCain Health Care Plan - Pros
John McCain's plan is market driven and reduces government regulation and involvement in the health care system.
The Michigan Messenger, in an article entitled, "McCain vs. Obama: Health Care Reform", by Diane Sweet indicates the following advantages to John McCain's health care plan:
- The current tax break for health care helps higher-income Americans. John McCain's proposal would simplify this tax break, making it the same for all Americans. $2500 for individuals and $5000 for families. This tax credit structure would actually benefit lower-income Americans more than those in higher-income brackets.
- Individuals that are healthy and do not have the need for state mandated benefits, federal policies may be more affordable. When insurance providers are able to cross state lines and sell policies without state mandated benefits, individuals will be able to shop for policies that are more affordable.
- Reducing regulation in the health care industry and allowing a freer market will increase competition which should drive down premium costs.
- Tax credits for individuals and families may provide the funds needed for people currently without insurance to be able to purchase insurance for themselves or for their families. Even those people below income levels for paying taxes would be eligible for the tax credit and payment toward health insurance.
- Increased availability of generic drugs will provide individuals with access to lower cost medications.
- With the tax credit and increased choices for individuals, John McCain believes that people will take more control of their health care, look for ways to save money and in turn decrease health care costs.
Analysis of the John McCain Health Care Plan - Cons
According to factcheck.org, John McCain's health care proposal would reduce the number of uninsured by approximately 1 million.
Bob Laszewski, in his Health Care Policy and Market Review, has indicated the following about John McCain's plan:
- The plan is an outline and lacks specifics. But as it stands, the proposal will not cost the federal government a great deal of money. This is because much of the plan has to do with eliminating the tax exemption for employers and this would offset tax credits to individuals (although individuals would now need to pay taxes on benefits paid for by their employer).
- The plan lacks specifics on how pre-existing conditions will be handled and how individuals with prior health concerns can get insurance and how much their premiums will increase. In addition, the plan allows age-rating and medical underwriting for both age and pre-existing conditions, causing high premiums for older Americans and lower premiums for younger.
- The current price of insurance for a family is approximately $12,000 per year. The tax credit of $5,000 per family will still leave an insurance bill of $7,000 per year. In addition, they will pay taxes on the entire $12,000. Younger people, with lower insurance premiums may make out well with the $2,500 credit, but as their age goes up and premiums increase, the credit will not be enough to pay for premiums.
- Although John McCain expresses the importance of improving quality and cost containment in the health care industry, his plan does not address this or provide details on how this is to be accomplished. The ideas he has offered for this: generic drug, drug re-importation, co-ordinated care, offer little hope of creating major savings.
- State-mandated benefits are not specifically addressed but when health insurance is no longer limited to states and can sell across state lines, states may no longer be able to mandate conditions of coverage. Some of these mandates include: children's vaccinations, maternity coverage, covering children while in college or paying for preventive tests such as mammograms. It is unclear if insurance providers will have certain coverages or whether individuals will need to pay extra or not be covered for these services.
- It is possible some insurers would sell across state lines, opting for the deregulations, while other companies would continue to sell within the confines of the state regulations. This would cause an inbalance, with healthier people opting for federal plans and people with health concerns staying with state plans. This could lead to negative consequences for the state regulated plans.
- With the elimination of the employer tax credit, employers would have an incentive to drop insurance coverage altogether, sending employees out to find their own insurance. This would cause older Americans and those with pre-existing conditions to try to find coverage they could afford and would cover their health care needs. Any wage increases in leiu of health insurance may cover costs initially but will not as premiums continue to increase each year.
- The coordinated care Medicare payments have been tried in the past, and have not worked as medical providers did not like it and refused to participate in the program. The proposal does not explain what incentives providers will have to participate in the program.
- Disallowing and reducing payments from malpractice lawsuits is not clearly laid out. The details do not indicate how to determine what medical and safety protocols are.
Kaiser Health Policy Report
- According to this report, Henry Aaron (Brookings Institution) explains that when employees need to go out and find their own health insurance, it is likely they will cut costs by cutting benefits and end up paying higher out-of-pocket expenses. Although this approach may work for a healthy young person, should they become ill, their expenses will be higher than they expect. In addition, older Americans will face higher premiums.
- Oliver Fein, president elect of Physicians for a National Health Program, in an opinion piece in the Philadelphia Inquirer, sees the McCain proposal for an individual health market as "a sure-fire formula for increasing the number of uninsured and uninsurable adults."
On Governor Palin's Views on Health Care
Although we do not at this point know much about Governor Palin, there is a limited amount of information available regarding her views on health care;
According to an article in the Wall Street Journal (WSJ) which appeared on Thursday, September 4, 2008 discusses the issue of health care in Alaska, "Palin did not make health care one of her top prioritites, but where she did take a strong stand on health, it was for the free market..." In addition, the WSJ indicated Governor Palin "reluctantly" increased Alaska's versions of SCIP to include children in families whose annual income is up to 175% of the federal poverty guidelines. This, according to the WSJ, is "stingy compared with other states."
According to the Washington Post, on Friday, Sept 5, 2008, "Palin and others think that more competition will reduce costs and lead to better care." Hospitals and medical providers argue, however, that this leads to increased cost in the way of advertising and therefore to higher costs. In her tenure as governor, the Washington Post continues, "Palin responded with an aggressive, uncompromising and to date unsuccessful push to promote competition - an effort consistent with her free-market ideals but also welcomed by the medical groups that helped finance her 2006 campaign and an industry lobbyist who served as a top political advisor."
"Straight Talk on Health System Reform", JohnMcCain.com
"McCain vs. Obama: Health Care Reform", 2008, Aug 25, Diane Sweet, The Michigan Messenger
"A Detailed Analysis of Senator John McCain's Health Care Reform Plan", 1008, June 10, Bob Laszewski, Health Care Policy and Marketplace Review
"Fact Checking McCain", 2008, Sept 5, FactCheck.org
Kaiser Daily Health Policy Report, 2008, Sept 5, Health08.org
Kaiser Daily Health Policy Report, 2008, Sept 5, Health08.org