Guts, Brains, and Health Care Reform
With less than 40 days to go until the presidential election, let's assess where things stand.
Obama appears to be building an edge in the polls and has some upward "mo." That said, the election appears to be a lot closer than it should be given this fact: on two of the issues that concern voters the most--the economy and the war--the policies of the Bush administration are widely viewed as dismal failures. Yet McCain's plans are clearly an extension, if not an "amping up," of precisely those policies.
There's a third issue of great concern--health care--which should also favor Obama, but it hasn't been discussed much, something I'll try to rectify in a moment.
Another reason the election feels closer than it should be is the strange, erratic, even histrionic campaign being run by McCain. Most recently, it's the "economy's fundamentals are sound," the whole "will-he, won't-he" on the first debate, the distracting, self-aggrandizing way he placed himself in the bailout debate, the politics-first choice of Palin. It all points to the kind of unpredictable, seat-of-your-pants, gut (vs. reality)-driven leadership style of the last eight years.
And, as noted above, his policies seem to derive from a meeting where he and his advisors took a close look at the last eight years and said, "Damn, that's good. Let's double down."
You might think that voters who haven't already made up their minds would look at these bad policy choices along with all this recent flailing about, and feel more than a little squeamish about handing the reins to this team.
Yet, it's close. There are lots of reasons for that and I won't try to sort them out. One factor that has perhaps been underappreciated is that even now that folks are starting to pay attention, they often don't believe that the candidates will do what they say they're going to do. If that's the case, why bother listening to their differences (negative campaigning is effective here as well)? Better to make the call based on gut reactions.
That's a mistake. Both candidates will put great effort into implementing their plans. When John McCain says he's out to cut corporate taxes by a third and pursue "victory" in Iraq, I believe him (a Democratic majority in Congress would try to block him, but I don't want to bank on their success).
So, with no disrespect to gut reactions, and to complement the beginning of the debating season, I recommend we head for the weeds to take a closer look at the other big issue of voters' minds: health care.
The current system is unraveling...that much is known. And the two candidates have very different plans to fix it. Here are some things voters should know about them.
McCain: A $3.6 Trillion Tax Increase and a Shove Into the Open Market
In the first presidential debate, McCain argued that he wants every family "to have a $5,000 refundable tax credit so they can go out and purchase their own health care." To which Obama later responded: "... you may end up getting a $5,000 tax credit. Here's the only problem: Your employer now has to pay taxes on the health care that you're getting from your employer. And if you end up losing your health care from your employer, you've got to go out on the open market and try to buy it."
You see, the 140 million of us who get health care for ourselves and our families through our jobs do not pay taxes, either income or payroll, on this part of our compensation. The McCain plan ends that exclusion, and thus becomes a $3.6 trillion tax increase over 10 years on workers. What was a tax-free part of your compensation is now taxable income. You'll pay income tax on it and you'll pay payroll taxes on it.
Once that happens, your employer's incentive to offer coverage is diminished, and experts estimate that around 20 million people will lose employer coverage.
So, you're thinking: Wait a minute. McCain's health care plan makes part of people's income newly taxable and that leads to millions losing health coverage. That can't be all there is to it.
Of course not. As he said in the debate, he'll take that revenue from the tax increase, and give it back to you as a tax credit, so you can go buy health care on the open market, or as the health care wonks call it: the non-group market (the group market is where your employer shopped for coverage for the group formed by you and your co-workers). In fact, the McCain team claims that the plan is revenue neutral: they taketh by subjecting more of your compensation to the income and the payroll tax, and giveth back through the subsidy.
But there are two very big wrinkles here. First, when it comes to brokering a deal with insurance companies, there's strength in numbers. Shopping for health care in the non-group market is not most people's idea of a good time. They have no obligation to cover you--you as much as cough in there, and they're likely to have you escorted out. As my EPI colleagues Bivens and Gould wrote in a new paper, "the individual market is characterized by poor information about policies, discriminatory pricing, coverage exclusions, refusal to cover preexisting conditions, and denials of policy renewal. Even worse, other planks of the McCain plan actually call for removing many of the (already insufficient) consumer protections that currently exist." (BTW, see their paper to be the first on your block with an estimate of the number of folks who might lose coverage in your state.)
Second, the McCain subsidy grows at the rate of overall inflation, a rate that is far below that of health coverage on the open market. The average family premium is already around $12,000, so the $5,000 per family subsidy is already judged by many experts as too low to cover the cost of a decent plan in the private market. And since premium costs have consistently risen more than three times faster than overall prices, the McCain subsidy will quickly become more inadequate over time, driving up the number of uninsured.
Obama's Plan: What He (and others) Learned in the 1990s
The health care debate/debacle of Bill Clinton's first term taught health-care reformers a critical lesson: though people are frustrated with the status-quo, we're nervous about the impact of big changes in it. To be able to say to folks, "You can keep what you have" is a big political selling point.
This was a feature of all the D's plans--Edwards, Hillary Clinton, and Obama. Under Obama's plan, if you're okay with your employer's plan, you keep it. Employers who don't now provide health care have to contribute ("pay or play") to a new public plan, a kind of Medicare for All (small businesses get a tax credit to help them offset the cost). Those without employer coverage can join this plan through a "health insurance exchange" which works as a large pooling mechanism to give this disparate group the bargaining power they lack as individuals.
Insurers in the plan are regulated such that they can't do all that nasty stuff that goes on in the non-group market. The pooling and the insurance regs create some cost-saving efficiencies, and Obama goes after a significant waste of money in the current Medicare plan: the subsidies to private HMOs through Medicare introduced by the Bush prescription drug program--that saves $150 billion over ten years.
But these cost savings don't pay for the plan and there are no free lunches in health care reform. The Obama plan will involve some serious resources, estimated by the campaign to be in the $70 billion annual range. He pays for it through the war dividend, allowing the high-end Bush tax cuts to sunset, and the Medicare savings just noted.
The punchline: check out the graph on page 3 of this analysis. Compared to the current situation ("baseline"), Obama's plan is expected to cover a lot more of the uninsured, while McCain leaves that share unaffected.
These are but thumbnail sketches of major reforms, but the most important difference here is really philosophical: McCain stresses a market solution to health care. It's a YOYO (you're on your own) move, based on the belief that a bunch of subsidized--albeit inadequately subsidized--individuals scurrying around the nongroup market will create cost competition. That might work with normal goods. It won't work with health care.
In fact, McCain recently wrote this very unfortunate sentence: "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."
Ouch.
I realize that not every voter wants to hear about "insurance exchanges" and "risk pooling" at this stage of the game. But they should know that McCain's plan threatens a very large change in the treatment of heretofore untaxed benefits, a large decline in employer coverage, and a subsidy that starts out too low and grows at about a third the rate it needs to in order to keep up with the costs families face today.
Okay. Let us surface from the weeds and rejoin the rest of the world. But as we do so, let's get the guts working with the brains. If that happens, this election may not be nearly as close as it appears to be today.
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When there's illegal immigrants and other non-payers introduced into the health care system, - The charges for services upon the non-paying are passed to the paying / insurance companies. That's why health cost are rising. We're paying for the uninsured / non-paying / illegals. Hence rising cost for the general population. If we could get the illegals to buy in, I'm sure we'd have a different story.
It would be nice if everyone could get treated for free on the USA's tab, but I don't think that Ole Teddy Kennedy would be waiting in line at the Hyannis health clinic only to be told he would have to wait 6-8 weeks for his surgery and paperwork to be completed.
Every American needs to watch Michael Moore's "SICKO". After watching it, my eyes were open to the devistation that our for-profit health care system is having on our country. It's an embarrassment and disgrace to realize that doctors are on review boards denying claims which cause deaths simply because it effects the bottom line.
If we had medicare for all like Canada, yes, we would be paying higher taxes but premiums, co-pays, and deductibles would be eliminated. People say America has the best health care in the world. This is true, but only for those that can afford it. Even if you have insurance, this doesn't mean that you will get the care you need. If your condition is too expensive to cure, you will be denied. If you try to find another insurance company, they won't insure you because you have a pre-existing condition.
When you compare Canada to the USA, Canadians pay $3,000 per person (taxes and health care) compared to the US that pays over $7,000 per person just for health care not including taxes. So Americans have the most expensive health care system but get the least benefits.
We have to think of health care in a different way. What we have now is not working. People are losing their houses, their life savings, and their dignity all because of profits for insurance companies and shareholders.
Pass HR 676. Go to michaelmoo
An interesting question:
Would the current Congress be dropped from it's current health plan and have to go find their own coverage under McCain's plan? With nothing but a $5000 tax credit to subsidize it?
It probably wouldn't really affect their families. Insurance plans might fall over themselves to cover them and the money might not be much of an issue. But it might be educational for them to have to shop for it all the same.
Having lived in Canada for several years (as an adult who had experienced the US system) I can tell you that it is not without flaws. Higher taxes. Areas remain underserviced for no good reason. Many healthcare providers take on a 'civil servant' air. Innovation and research happen at a snail's pace.
That being said - I wasn't covered and my visit to the minor emergency / after-hours clinic was (big gasp) $35CN. That was the equivelent of a regular COPAY with my american insurance plan prior to moving. I never met anyone stressed out about how to pay for a dr's appt AND the groceries they needed to get on the way home. A great many of the health conditions that we spend millions trying to treat could be avoided by a better diet, less stress, and some old-fashioned wisdom that we turn our educated, Western noses up at.
The US has a much larger population than any other country currently using socialized medicine that I can think of. It would be folly on our part to think we can just take even Canada's system and overlay on the US. But, we can certainly use it as a blue-print / template to work from. We can't do much worse than we already have.
Except maybe, McCain's plan!
Higher taxes??? Are you kidding? What do you call upwards of $500 per month for health care premiums, a good deal? Nothing is free guys, either you pay it into a national system like we have up here or you pay it to an insurance company. I'll stick with the feds, and keep my house thanks.
As Dr Phi says.."How
Call it a tax or whatever you want. For that matter, keep your current system and bet your house, because that's what the good old American "health" care system might eventually force you to do.
Think about it. Canadians arn't the ones screaming about no health care insurance, neither are the Brits, Swedes or the French. Your system is broken.
The simple fix is to put everyone on the same plan as the old people have in this country, Medicare with a private supplemental. It is very similar to the Australian health system. You do not hear the old people complaining. It would be cheaper for everyone. Yeah, you might have to be on a waiting list for elective procedures but you will not be for emergency or urgent care (cancer, heart, or other problems).
To anyone, especially republicans, who says that they do not like the government deciding who their doctor will be or when, I have news for you the insurance companies do that NOW.
The sad fact is that this country will wait until the whole health care system has collapsed in this country (sound familiar?) before the government will act. That day is not far off.
Thank you for this piece. It is clear that many people do get it. The AMA is now running ads and I haven't checked out their take on this issue but I will bet that they, too are starting to tire of being overridden by people sitting in offices at insurance companies who have no health or medical background.
Bottom line is that we get nothing for the taxes we pay and we are paying on average 600-1200 a month for individuals and families. Nearly $12, 000 a year to prop up an insurance industry that has plunged millions into bankruptcy; and denied hundreds of thousands the care they need.
When it comes to the food budget, you can tighten your belt; and eats less, find cheaper but filling foods; with gas, you can travel less; but how does one in good conscience cut back on health when you know it could mean a parent, a spouse, a child's life.
This issue is a tough one for me. I'm not sure I want a nationalized health care system.
Has anyone ever been to a VA Hospital? The government can barely run those for the limited number of injured soldiers. How are they gonna run it for our nation? It's a grand idea - national health care, but I'm skeptical of the implementaion.
Nixon is dead, and his for-profit HMO's should be laid to rest as well. Let's finally put the GREED BROKERS out of business, and this is the chance to do it. Regular folks don't foreclose on their family homes because they WANT to, but the flippers/investors who bought up real estate by the bulk are offloading now letting them fail. NOT the folks I want to benefit from any bailout. If your thirsty for change, VOTE OBAMA!
Haven't you all seen the video of Sarah Palin being "healed"?
That is their Health Plan.
Even if this bail out goes through, the root of the problem is still there. At least half of these house foreclosures are because of high health care costs. As long as we have high premiums, co-pays, and deductibles, the potential of house foreclosures is still there. We need to pass HR 676 which is medicare for all or single-payer health care system. Let's look at what works in England, France, Canada, and other places and do what works from each of these countries and avoid what doesn't. In no other country do citizens have to lose their houses because of health care costs like we do here in America. Yes, there were some people that got into their houses because banks were very lenient, and some people were also lured into adjustable rate mortgages with no cap on that rate.
If I owned a bank, I would have called in all these people who had an ARM and given them a fixed rate. I feel it's better to have people pay their mortgages at what they can afford rather than have people walk away from their home, the banks get nothing, and houses are sitting there depreciating because no one is there to take care of them. It's just greed plain and simple.
Everyone needs to go to Michael Moore's website michaelmoo
Thats all we we need....th
Thank you so much for this blog! I am an employee benefits broker and know the state of our health insurance system all too well. McCain's plan is a poorly veiled attempt to assist the behemoth insurance carriers in forcing millions of American families out of their employer sponsored plans (which offer everything from guaranteed coverage even for those with pre-existing conditions to controlled rate increases for small employers) and in to a market (individual and family plans) hostile to consumers.
Does he realize that, as a 72 year old cancer survivor, McCain himself would be considered uninsurable in the CURRENT market?
And what does he propose to deregulate? Is he proposing that individual and family plan benefits be allowed to sink below the minimum coverage requirements that are currently in place?
Either Senator McCain has absolutely no knowledge of our current system or he is deliberately selling out small business owners, their employees and their families who are in desperate need of health care.
Can you imagine what the effects of this exponential increase in the numbers of uninsured would have on us taxpayers? Remember, it is always the taxpayer that has to take on the cost of treating sick or dying Americans who do not have private health insurance.
McCain doesn't even appear to have a clue about the details of his own plan, and it showed during the debate. I doubt if many politicians would have a clue what it's like to have to purchase their own insurance, but McCain clearly doesn't. His shifting of the tax burden, and the five thousand dollar tax credit is an insult to anyone that has to try to buy their own, and will only encourage employers to stop offering coverage altogether. His plan is just more of the same old Republican BS that will end up costing everyone more in the long run.
Said to say, but as long as Obama stays black, this election will be close.
gin,
Obama is half white isn't he?
(continued from below....)
"But people don't vote based on issues!" I disagree. Yes, people based on emotion. But emotion is created through information. Think of a preacher creating great emotion in a church. To do this she uses lots of information (boring, tedious stuff actually) presents it as a story (humans are wired for this) and THEN the emotion and the "ah hah!" moments occur. Or, think of an infomercial. Information first, then emotion. You can't skip the first part! And the information needs to be explained VERY WELL and repeated over and over.
It seems like we have given up on educating the voter. Instead, we use focus groups and read polls and create soundbites. We try to whip up emotion without respecting the voter and giving them enough key information. Of course, the right does this on purpose because their information SUCKS! But we need to do the opposite: use our convincing information as an asset.
These ads should be 60-90 seconds in length. One topic per ad. And FLOOD the ads all over the country. Target undecided voters and independents.
It has been shown the people do like these types of ads. Why don't we see more of them? And how can we get this message to Obama headquarters??!!
If you have any good "pull" with them, pass this message on please!
I have a question for everyone: Do you think the average voter has even a clue about McCain's horrible health care ideas? Do you think they know the difference between Obama and McCain on this issue -- or any issue? Do you think the voters are getting the information they need to get them motivated to vote -- and vote in their own best interests?
I don't think the debates, TV interviews, newspaper articles, blogs, speeches..
My personal solution would be to flood the TV and radio airwaves with TV ads that feature Obama simply talking into the camera and explaining his plans for fixing the mess we are in. Have him compare his ideas to McCain's. That should scare people to death and motivate them to vote.
Instead, we depend too much on other media to "cover the issues". Yeah, right. People don't go out of their way to research issues. And the devil (or saint) is always in the details!!!! They need it presented to them right their in their livingrooms.
(con't above...)
You are right to share.
Share everything, that's what I say. Force people to share, socialism. Great ideas.
Thanks justshareandbenice. You have changed my life.
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