Update2: The Great Health Care Debate

McCain's plan also ignores the difficulties for the average uninsured consumer(who is very likely in a low-wage job)navigating the choices in the market. Insurance companies dealing with individuals rather than companies with lawyers will increasingly obscure the drawbacks in their plans.

There is no way around the fact that McCain's plan puts an increasing burden on those least able to pay for it.

Karen - -

McCain has been the benefiary of a government run health insurance plan for all of his life. All I ask as a citizen is for what he gets.

And you buried the lead. The typical ESI (employer-sponsored-insurance), according to your source is $12,000. That's probably for a family. My individual, single policy is $8400/year (that's because I take Lipitor and Lexapro - thank you Humana). Compare that cost to the average income in America. If you have to eat and need shelter and pay taxes, how much do you have to earn to make the nut.

Additionally, individual health insurance buyers do not, and will not, have the bargaining power to negotiate rates and coverages. Since the government forbids individuals from creating ad hoc pools to do this, then the government should provide the means to do this, through a goverment run system.

McCain has been the benefiary of a government run health insurance plan for all of his life. Share the wealth, John.

Stay alive 'til 65!!

I don't know why we think the insurance companies are going to start offering affordable, comprehensive healthcare for individual Americans.

They haven't done so to date.

KT: I think you nailed it with:

"many experts say that the kind of system envisioned under the McCain plan would encourage even more employers to get rid of health coverage."

While its nice for McCain's staff to provide some clarification. I think they are painting a best case perfect world model of his plan. When it hits reality though there will be a lot more un and underinsured people.

I also don't remember any type of oversight authority mentioned in McCain's plan. What happens when all the fraudulent companies come out of the wood work? Is this going to be the states' job? We also got a very pro business supreme court right now. What happens when people can't turn to the courts for relief when they are ripped off?

If McCain’s plan is implemented, I will almost guarantee that any company now offering health insurance to its employee’s will drop its insurance plan for all non-union, non-management employees.

KT: at a time when many employers are already scaling back, raising the cost of and even dropping health coverage for their workers,* many experts say that the kind of system envisioned under the McCain plan would encourage even more employers to get rid of health coverage.

You definitely get that point right, but this one: Which, by the way, is not necessarily a bad thing. The current system of getting your health insurance as a fringe benefit from your employer does not make a lot of sense economically, and is one of the things that has given rise to the many problems--especially rising costs--in the health care system today.

While the current system of employer offered plans isn't ideal, the average citizen going alone is absolutely worse, particular based on how current health plans are setup. This isn't car insurance, health insurers can justify any number of pricing plans they want because they control contracted pricing with doctors and hospitals that consumers almost never see. Current efforts by plans to institute "transparency" is misleading, offered pricing is never the actual contracted pricing between the doctor/hospital and the health plan - because the health plans do not want other plans to see this competitive information.

McCain's plan is just standard GOP talking point of cut taxes to save you money, but the fact is, real costs are never as straightforward as they want you to believe. Having worked at a BCBS, I can tell you, his plan will only benefit the health insurers in the end. But I guess that shouldn't surprise us...

Thanks. This is the question I had yesterday. It also explains why they picked those numbers. They were the smallest credit that would leave the average American covered by an employer in the same place. They think.

The trouble is that it also leaves a large fraction of the other 47 million in the same place--unable to afford a thousand dollars a month for insurance, or unable to get coverage at any price.

BTW, a 5K tax credit for 25 million households is $125 billion. Assuming insurance companies devise products to hit the niche of 5K worth of coverage--some kind of high deductible plan and people do sign up in large numbers, where's that coming from?

BTW, this is yet another reason why the other candidates are wrong to kowtow to the insurance companies. They can't point out that there may be short-term excess costs converting to a universal system, but then the more efficient universal mechanism will start saving money. Over a ten year period a European style system is better and cheaper. McCain's plan locks in the current system of spiraling costs and shrinking coverage.

Oh, and if it's no different, if employers are going to keep doing the same thing and nothing is going to change for most people, then none of the free market competition he was talking about will have any effect. All that will happen is a 125 billion dollar influx from the treasury into insurance companies to provide meager coverage for more people.

Oh, wait, that's the idea isn't it? Just like paying insurance companies a premium to administer medicare participants less well, and a drug program designed to keep big pharma profits stable, on the public dime.

(This is what they mean by "free market" by the way. Corporate welfare.)

So, we're in the middle of a housing crisis called various things by various people; Sub-prime mortgage crisis, Big @$%@pile, whatever.

A big part of what kicked this off was individuals who did not have the time, the inclination, or the resources to really understand what they were signing on to. Another big part was these individuals believing that the lending companies had a feduciary responsibility to them as opposed to just trying to sell them the most profitible loan possible.

Add in a bunch of unregulated transactions in the background with no transparency to the homeowners and now we have a big mess.

So, now we have a health care proposal whose basis is to have a lot of individuals with niether the time, the inclination, or the resources needed to sift through what is going to be purposefully confusing information hawked by people with no feduciary responsibilty and the desire to make a quick buck.

So, when there is a bunch of unregulated transactions around 'bundling' peoples insurance and selling them off to other companies if they happen to get sick and this causes another crisis for this country, do you think its the individuals that will be taken care of or the health insurance companies?

Who is getting the big bail out around mortgages now?

Whoa that's some bad diction. Best not to write things in snippets spread over 40 minutes of time. I hope the ideas came across.

Why is not "politically viable" to mention the most logical, cost effective and efficient system of health care delivery?

On the "show of hands."

The general state of satisfaction with and faith in the future of people's current health care arrangements is decidedly different from 1994. But both independent analysts like Ezra Klein and politicians like Clinton and Obama are constructing plans as if the atmosphere were the same as in 1994.

The average American's experience with the health care industry is pretty much uniformly awful. You have to jump through hoops to see a specialist who can help you. Copays are rising, for both visits and drugs. Drug prescription numbers are dictated by insurance companies rather than doctors to maximize the number of scripts you have to get. (They define a "month's supply" as the maximum per script, even if the doc says otherwise, or your needs are otherwise in a given month. The result is that, for example, migraine sufferers having a bad month have to decide whether to take the drug or hoard it if they've had 5 headaches in the first 2 weeks of the month.)

There are endless gotchas designed to deny you the care your doctor specifies, and your doctor goes through a different set of hoops that you don't see, other than in the remarkably high ratio of admin to medical staff in the typical office.

It's completely dysfunctional. A bold approach could be sold now. But both the beltway experts and the politicians won't confront the insurance company lobby.

McCain Fluffer--

They don't think they can overcome the insurance and pharma lobbies. Those are the only beneficiaries of the current system.

Upon re-reading Douglas Holtz-Eakin's email, he seems to assume that the should an employee drop out of the company health plan, the company will give the employee a raise equivalent to the company's cost for the health plan.

Does anyone think that companys will do this.

No, WFD, I don't think he is saying that. He is saying that the employee will not see anything happen. He's wrong about the pay stub; there can't be an auto crediting going on. But when he gets his W2 his total comp will be 12,000 dollars greater, but the tax burden on that additional 12,000 will be offset by the credit when he fills out his tax form.

KT here--

Wow. All of these are great points. While I don't dismiss McCain's proposal out of hand, these are precisely the questions he needs to answer, as he seeks to prove he's got a better idea about health care. Tohst makes a terrific argument with the comparison to the forces that caused the housing crisis. Choice can be bewildering, even if you are healthy and relatively clear-headed. I have to hire a financial planner just to help me sort out the options that are available in my and Mr. Swamp's 401 (k)s. (And I have an MBA, for heaven's sake!)

WFD,

Wouldn't it be in a company's best interest to have everyone or no one in their insurance plan. Isn't that useful to them in negotiating for the best plan at the best rate. So, they won't offer raises to people who want to opt out.

Of course, that numerical advantage is the exact power individuals will not have, but I digress.

Also, the high level executives will continue to have the best plan paid for them by the company but thats another digression.

So, yeah, you'll see some companys wanting people to stay for the bargaining power and others wanting people to leave so they don't have to deal with the paperwork anymore. Those may offer their people a raise to smooth over kicking everyone out.

In the middle lies dealing with all the paperwork and needing the infrastructure to do so for just a few employees. I don't see many small to mid size companies wanting to be there. So, again, no. Why woudl a company want to give raises to people who are reducing the companys economies of scale and bargaining power.

KT: I think he also needs to answer what his chances are of getting his plan through Congress intact. None of the candidates are going to be able to do this in my opinion, no matter what their plan is. However, I think McCain's plan by far leaves a lot more places to hide bobby traps.

The Medicare Part D plan, the drug plan, was so complicated that various people set up small businesses to help seniors navigate the options. As I understand, it was still a mess. The mind reels at the idea of millions of people trying to figure out a plan for themselves.

No wonder congress can't work this out. I suggest we suspend their health coverage until they can get a good plan together for everybody.

Karen:

You are a total superstar for keeping this going.

This is exactly the kind of conversation we need to be having...right now!

KT: Why is the system so complicated? I spent a year in Canada in 1996-7. Had major surgery, three visits per week by a nurse while I recuperated at home , a monthly check up for twelve months, all prescriptions filled at a maximum of $15.00. The Toronto General hospital was simply fantastic. For one month after surgery I was given my own room. No additional charge.

Cost: Because I paid Canadian taxes the health care was free.

I know it is fashionable to call Canada's system "socialist" and to complain about waiting times. My relatives say that the emergency Room is always open and a Health Card ID get you treatment within 3 hours. Ambulance: $84.00 flat.

We can do all kinds of wonderful things in the technological world, but we simply cannot stop the ever growing greed of our investors who treat medicine and medical care as products.

Dear Karen;

Do facts and economic reality matter in the healthcare debate?

Fact: America is experiencing slow economic growth that may already be a recession.

Fact: Medicare begins paying out more cash this year than it takes in. Social security will do the same in about 9 years.

Fact: Baby boomers will be retiring and putting ever greater financial pressure on the Medicare and social security systems for the next 30 years.

Fact: The problems we are facing with Medicare and social security are the end game of failed socialist programs that promise more than a society can afford to deliver.

Fact: As a result of the four facts above, the last thing America can afford to do at this time is embark on a massively costly and economically disastrous "universal health care" entitlement that would place far more financial pressure on our society than Medicare and social security combined.

A very healthy economy is the only way to solve the heathcare, medicare and social security problems, and the worst things that can be done for the economy are the following irresponsible positions that are advocated by the Democrat party:

1) Abandon Iraq to chaos that would cause oil costs to explode by multiples of the $400 billion per year that the USA's annual oil costs have risen since "white flag" Harry Reid said on 4/19/07 that Iraq was lost and committed the Democrat party to unconditional surrender in Iraq regardless of the negative effect on oil prices and the very negative human and economic consequences.

2) Enact a massively costly new "universal healthcare" entitlement at the very moment that baby boomers are retiring and placing huge new financial burdens on America.

3) Radically raise taxes on the 25% of Americans that are already paying 86% of federal income taxes to give hand outs to the "poor", to give tax cuts to the "overburdened" middle class that is only paying 12% of federal income taxes, to fix the Medicare/social security mess, to balance the federal budget and to pay for "universal healthcare" and every other pandering government program the Democrats can devise to buy votes.

The reality is that Americans in need of healthcare have access to it under the current system, and America cannot afford to create an additional, enormously costly healthcare entitlement that would further damage our already fragile economy to the great economic detriment of all Americans.

America's founding father's never intended for the federal government to be in the business of wealth redistribution or providing healthcare and social security benefits to its citizens, and that is why they did not support an income tax. Thomas Jefferson said it best when he stated that "A government strong enough to give you everything you want is strong enough to take everything you have."

If facts matter to you, visit www.politicalrealityonline.com for a reality check on all the major issues before you commit economic suicide by voting for any Democrat in November.

Tohst--

It's not uncommon for small businesses to pay you more if you opt out. There are a fair number of couples with one spouse in a big corp and the other at a small business. It's in both employer and employee interest to split the difference, and it does happen.

KT--

Can you pass the thread onto MS? With some of the issues you think McCain should address highlighted? You know, citizen questions on the Straight Talk Express. Good for McCain if he handles them well, and would make a nice special Swampcast.

@PRO1--

The problem is you use quotes and logical like its 1776. It's 2008.

Fact 1: We have social security and Medicare

Fact 2: Whatever solution we come up with has to deal with Fact 1.

Fact 3: You are probably a very rich man/woman who benefits from the "tax" cuts that Republicans give you.

Fact 4: Democrats care about issues and Republicans care about war.

Fact 5: Thomas Jefferson was a republican. (It just wasn't called that back in 1776)

Another typical troll characteristic is the belief that putting the word FACT in front of a false statement overrides the truth value of the statement. This coincides with an inability to link to authoritative information demonstrating the truth-value of the statement. The word FACT itself has all the power needed.

Thanks for your persistence with this, Karen.

The issue, as Ezra Klein and others have noted, is that McCain, a life-long beneficiary of some of the nation's largest risk-pools (the military, the federal plan, Medicare) is challenging the notion of pooled risk.

What's McCain's objection to risk pooling?

As you say, the current choices for those forced into the individual health insurance market are hard enough to make if you're hale and clear-headed. And, given the existing burdens on employers, I'm inclined to believe many would pass the responsibility onto their employees.

Ok fine...I'll call Thomas Jefferson a Jeffersonian Republican. And I suppose he did disagree with the republicans today on one thing: WAR. He hated any national anything including an army.

Ms. Tumulty,
I would like to raise my hand. The cost of my employer sponsored insurance coverage has gone up each year for the past 3 years, while the coverage has gone down. I think my employer, and many others, would find creative ways to get rid of the health insurance benefit. I could see many employers switching to a benefit that contributes to a Healthcare Savings Account as a way of fixing the cost to the employer while still being able to provide a benefit that helps pay for medical costs for the employee. Of course, that will not provide any relief to rising healthcare costs, and it will not allow employees to pool together for bargaining power. I've got a bad feeling about this.

As for a topic post, I think that this email makes his plan worse not better. If the employers have the choice to provide or not provide insurance, It will defeat the purpose of the market driven insurance right? I mean if not every household has their own insurance independent of everyone else's then the insurance companies will just target the big "groups."

jayackroyd

Thanks for that. You are absolutely right that companys are already doing that today.

Aa long as there is a profit motive in health care, prices will continue to climb. God Bless the miracle of the so-called "free market."

Wait a minute -- the tax on the $12,000 plans is $4,200 which I would owe under the McCain plan, but I'd be covered by a $5,000 tax credit. So... he owes me $800?

Is that really the plan? I get the plan I already have, still pay no taxes and the government gives me $800 that it didn't used to give me? How does that save anyone any money? I like te bribe and all, but...

I'm pretty sure it's an up to $5,000 tax credit against actual "expenditures."

'Course, I don't know about you, but there is also the employee contribution, which shows up as wages on the w2. So that too should count to the credit.

Oh, yeah, what about the FSA? Do I get a double credit for that?

Or is it only for "insurance" and not out of pocket expenses. If so, who determines what a valid provider is?

This is just a mess.

I think Tohst makes a great point in his first comment, regarding the average American not wanting to deal with choosing their own healthcare.

I know if I had to sit down and puzzle through a dozen healthcare plans, I'd probably end up choosing by throwing darts. At this point in my life, in-depth knowledge of the health care system will almost have to be beaten into me.

Karen,

You indicated that the McCain "plan" would "encourage" employers to drop their group plans for their employees. You also stated that, "The current system of getting your health insurance as a fringe benefit from your employer does not make a lot of sense economically..."

In fact, it DOES make economic sense: First, more people are insured, leading to more well-care and catching health problems early, reducing the "emergency-room" system we have for the growing legions of the uninsured. Second, the employer gets a deduction for every dollar paid for health costs, thus paying for those costs with pre-tax dollars. Third, group plans MUST, by law in every state, take ALL of the employees, regardless of health history, pre-existing conditions, or other demographics that individual plan issuers use to weed out all but the youngest and healthiest.

Also, are you aware that the McCain "plan" virtually guarantees that most -- if not all -- employers will terminate their plans due to one too-powerful-to-ignore fact of the McCain "plan": the deduction for employer-paid health insurance will be eliminated, in toto? What shareholders will stand for paying this cost when it reduces the bottom line with no tax-advantages whatsoever?

Lastly, you may have noticed my quotation marks when I refer to McCain's "plan." It is clear that McCain has not much more than vague generalities in regard to lowering health care costs, improving health care access, how shifting costs from the employer to the employee will at all reduce the number of uninsured, and how those now ineligible for coverage (pre-existing conditions, poor health, old, etc.) will be covered (McCain simply says he will "work with the states" to cover everyone - How, when Medicaid is being slashed more and more every day?). Worst of all, where the heck will he find money in the federal budget (except by borrowing from China) to provide a $5,000 TAX CREDIT to each American?

It is just more bamboozlement, and the press just keeps hammering Obama and Clinton for not having realistic or serious proposals -- they do; but McCain keeps getting a free pass because he is so "likeable." We can see what terrible things can happen to our country and the world when a "likeable" but clearly unqualified and unprepared man is given a free pass by the press (and the Supreme Court); do we really want to have at least 4 more years of the McSame?