Imagine a new health care proposal that does the following:
- Continues employer-based health insurance.
- Maintains Medicare and Medicaid in their current form, though reimburses healthcare providers based more on quality measures, not just volume.
- Maintains individual and familyaccess for purchasing insurance, but allows crossing state lines to take advantage of premium cost differences.
- Prevents health insurers from dropping their insured and allows job-to-job portability.
Some might call it an improvement over the flawed American healthcare system. Critics might call it an anemic attempt at a fix, too little, too late. Such have been some of the comments aimed at Senator John McCain’s healthcare reform proposal.
The essence of the McCain healthcare proposal is a fundamental change in the way we fund healthcare today: Provide disincentives to employer-funded access to healthcare. It achieves this by eliminating the employer tax break that has provided employers a tax incentive to pay employee healthcare premiums. In its place, individuals will receive a $2,500 annual tax credit and families will receive a $5000 tax credit.
In this scheme, employers will, in effect, be forced to bear a substantial increase in costs for employee healthcare coverage, or simply shift a large(r) share of the burden to the employee.
Will the employee be better off? Though the tax credit covers only a fraction of the annual healthcare insurance premium (average $12,000 per year for a family of four), the McCain plan also provides for steps to reduce healthcare costs, *hopefully* reducing healthcare insurance premiums.
What is not included in the McCain plan...
Absent from the McCain proposal is a plan to create a federally-funded and centrally-run healthcare net, as proposed by the Democratic candidates in various forms. In fact, he has opposed the concept of universal healthcare, arguing that Americans should not be forced to enroll in any program, public or private.
Senator McCain’s plan instead proposes a set of mandates that will be charged to state governments to implement a healthcare safety net for the under- or uninsured. Enrollment will not be mandatory. He calls this the Guaranteed Access Plan, or GAP. He envisions state-runprocesses, allowing variation from state to state to suit local needs, but partially federally-subsidized. He proposes to establish a non-profit corporation that contracts with insurers to provide low-cost coverage to the uninsured, with assistance provided to those who cannot afford it. (This part is not entirely clear in the plan.)
“Has any candidate insisted that genuine and effective health care reform requires accountability from everyone: drug companies, insurance companies, doctors, hospitals, the government and patients? Yet that is the truth upon which any so-called solution must be based...
“Democratic presidential candidates are not telling you these truths. They offer their usual default position: If the government would only pay for insurance everything would be fine. They promise universal coverage, whatever its cost, and the massive tax increases, mandates and government regulation that it imposes. I offer a genuinely conservative vision for health care reform, which preserves the most essential value of American lives — freedom.” -Presidential candidate, Senator John McCain, October, 2007
The McCain plan in its entirety also proposes:
Families should be able to purchase health insurance nationwide, across state lines. Presently, healthcare plans are required to adhere to in-state regulations. Thus, California policies sold to California residents adhere to state laws set in California. Under the new proposal, a California resident would have the option of purchasing a policy created in Arizona, or Florida, or Michigan. Proponents say this increases competition. Critics say it opens the door for insurer abuse by allowing them to “cherry pick” the healthiest people.
While still having the option of employer-based coverage, every family will also have the option of receiving a direct refundable tax credit - effectively cash - of $2,500 for individuals and $5,000 for families to offset the cost of insurance. Families will be able to choose the insurance provider that suits them best and the money would be sent directly to the insurance provider. Those obtaining innovative insurance that costs less than the credit can deposit the remainder in expanded Health Savings Accounts. Positives: Who can argue with a tax credit? It’s essentially money in your pocket. Negatives: Will this tax credit be sufficient to offset the loss of employer-covered healthcare premiums if the tax incentive to employers is eliminated?
In an effort to address the rapidly growing portion of the healthcare bill from prescription drugs, Mr. McCain proposes that drug re-importation be allowed, providing access to Americans to the lower costs of drugs in Canada and Europe. He also proposes to enact changes that accelerate the availability of generic drugs. All three candidates agree on the reimportation issue, an issue opposed by the Bush administration on the grounds that there would be no way to guarantee safety and quality. The three candidates instead have subscribed to the argument that most drugs are manufactured by American, European, or international companies that already sell to the developed world markets, and that safety and quality are, therefore, not major concerns.
Mr. McCain is the only candidate among the three who specifically addresses medical liability reform, so-called "tort reform," that eliminates lawsuits directed at doctors who follow clinical guidelines and adhere to safety protocols. The ability to pursue legal action when genuine injury or negligence has occurred will be preserved, but he aims to reduce frivolous lawsuits. McCain is the only candidate to speak plainly on this issue. In fact, he has accused his Democratic opponents of bowing to the trial attorney lobby on this issue, allowing frivolous lawsuits and defensive medical practice by physicians to continue in its dysfunctional present form. (In my view, any healthcare proposal that hopes to reduce costs substantially needs to address this issue at some point.)
True to his loyalty to the military, Senator McCain has proposed a revamping of the way veterans access healthcare service. Presently, veterans must travel to the relatively few VA health centers. Instead, he proposes that veterans be provided an electronic card that permits services to be obtained wherever the veteran chooses.
So, is the McCain healthcare proposal a realistic solution that hopes to preserve much of the good in American healthcare, but just fix the parts that need fixing? Or is it a process that perpetuates a profit-driven, costly, and largely inaccessible system that will leave Americans no better off than before?
Although the proposal is detailed, in the view of many, it is not detailed enough. As the election draws near, we can only hope that the plan emerges in a more detailed form that shows Americans exactly how much this plan will cost and how much it will save, how accessible the GAP program will make health insurance to the growing ranks of uninsured, and to what degree regulation of the insurance industry will be enacted, particularly from a candidacy that has shied away from direct regulation of industry. In particular, we hope for more detail on the financial impact, both individually and nationally, of a shift away from employer-based insurance to individual insurance. This one radical change has the potential for either major improvement in the current system, or major potential for increased personal financial burden.
Be sure to read Dr. Davis's post on Obama's health platform, too!
Published On: June 02, 2008