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.
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
This is as clear an explanation of the disastrous McCain plan as I have read! Insurance stuff is so complicated that most of us just ignore it or complain about it. Jared has put his finger on the most radical part of McCain's plan -- so radical that even his own advisors have called it so. The taxation of benefits would be a radical break with the status quo, one of those McCain "gambles" that would not doubt provoke a firestorm of protest all over the country. But there has been little discussion of it. We all owe it to ourselves and our families to understand these two approaches to health reform, because the health care crisis is close to a "tipping point" and this may be the decade where we really have to deal with it!
Check out a post I wrote on this a week or so ago here at HuffPo -- http://www
One side effect of the existing insurance based health care system that never gets discussed is this: Since you can switch insurers, as long as you are insured by the private sector, there is not really much incentive to keep you healthy. So, by the time you are 65 and entitled for Medicare, you probably have neglected your health more than you would have if you had better access to preventive care in your first 65 years, and as such contributing more to the costs of elderly Medicare. So, reorganizing health care along the lines of a single payer for all, would probably slash costs of EXISTING Medicare for the older folks.
This is not true, most insurers incent for preventative medicine. It's those without coverage that may pose a higher risk. The average American is seeing higher deductibles, coinsurance and maximum out of pocket expeneses, on major medical, where preventative care is still a copay. Well-child check ups, well care for women and men all continue to remain a low copay while, major services continue to rise. Under the high deductible plans many preventative services cost the insured nothing, providing better care. Allowing care to transfer without preconditions, as long as you were covered without a break of 63 days, allows for continued care. As people age, there are going to be higher costs to care. People are living longer, because of medicines and new procedures. I am for Obama's plan, but socialized medicine will not work.
Check out the top three insurers and what their CEO's have made. They run like any other major corporation and are beholden to stock holders. They need to be reformed.
As a nation we need to do a better job in advertising CHP and medicaid to those in need. We need more insurance companies to invest in community clinics. Medicare is expensive because there is a lot of fraud in it. There is a lot of negotiating of contracts between providers, and there are penalties for those who don't sign up for medicare by a certain age, even if they have other insurance. The system needs to be reworked back to basics.
The insurance companies very carefully fund selected preventive care measures based on: a) the average amount of time that an individual is likely to be their client, and based on this, the minimum of preventive care applied in this time range that might save them money; b) pressures from the corporations who are their clients and/or regulation. They have no genuine interest in their members' long-term health because it does nothing for their bottom line. For example, a drug that saves a fortune 10 years down the line but is more expensive now remains highly to be covered.
If the private sector had a fix for the health insurance problem we wouldn't be having this discussion. But it doesn't. It will take an act of congress to fix the issue.
I likes what Obama said on 60 mins. It's what I've wanted for several years. If you like your private insurance, keep it. If not, there needs to be a government system that you can buy into with premiums based on a percentage of your income. I work per diem and my income can be erratic at times. I have not applied for chip for my son because we would go in and out of eligibility and have to reapply. Income ranges would encourage people to turn down work in order to keep within the income range that qualifies them for affordable insurance.
Obama is the first person I've heard say that premiums be a percentage of income. It's the ONLY fair way to do it.
Fixing health care is easy now.
Just have all the HMO's go into deep irreversible debt - maybe one or two of them could go bankrupt - and then the government would work 24/7 on a $700 billion bailout package...
solution to health care problem is sooooooooooo simple....
Way too simple. They won't go for it. I agree that it is the best solution.
I am amazed that the every Republican campaign ad always includes a phrase along the lines of "The democratic candidate wants to raise your taxes.
The response that is never raised is that you have to look at what is often referred to as "the total cost of ownership". Taxes are just a a part of the total cost of ownership.
Let's assume that the Republicans would in fact give everyone a $1000 tax cut.. But are they really better off if at the same time your health insurance deductible goes from $1000 to $2000 or if gas goes from $2.50 to $4.00 a gallon?
Increases in healthcare , gas prices, interest rates and general inflation are all form of taxes. They all eat into your discretionary spending.
The response to the question of taxes should be. "You are already paying higher taxes under the Republican tax plan. The difference is that your increased contribution is going to the oil companies and the health insurance industries and not toward enery independance and better health care and better education and better roads.
Let's try to educate the American public in the reality that lower taxes does not mean more money in tjheir pocket. It just means higher interest rates to pay for the deficits which means higher mortgage payments. It means increased foreign ownership of the U.S. debt which means a devalued dollar which means higher costs for everything we import.
Yeah, Bush gaves us tax rebates and tax cuts -- but state and local taxes went UP to compensate.
Bush didn't "give us" diddly. We stole it from the next generation. This country hasn't had an honest "tax cut" in 30 years.
This article is 100% accurate, yet still doesn't identify all of the disastrous effects of the McCain health care proposal. His new health insurance tax on employers will push more employers to outsource jobs. And his "private market" alternative is a joke. A $2,500 tax credit won't begin to purchase decent insurance. And individual insurers are allowed by law to engage in "health underwriting", something that effectively excludes most people over 40. So it will have a highly discriminatory effect to boot.
McCain's plan is an outrage that the brain dead media has shown no inclination to discuss.
People hear the $2500 part -- wow, big money. But it's not really going in your pocket, it's just less taxable income. Don't mean squat if you are already living paycheck to paycheck.
Yeah, and I was wondering something: This article was, for me, a little ironic (perhaps the better word would be timely) in light of the fact that I broke down and decided to be fair to McCain, dialing up his website and checking out his proposal for health care reform.
Okay, check this: " Those obtaining innovative insurance that costs less than the credit can deposit the remainder in expanded Health Savings Accounts."
IE if the insurance is less than $ 2,5 - 5k, you get to roll the savings over to an HSA.
But what if I want the cash? The site doesn't mention anything about being able to do anything else with the money. Can I get some straight talk on this?
When contemplating their choices on the issue of health care the American voter won't get to chose between "good" and anything. We get to chose between things like "Bad and worse" or "Horrible and more of the same" or "Kill you quick and make you really sick".
NOBODY RUNNING SUCCESSFULLY FOR OFFICE WANTS TO DELIVER A SOLUTION TO THE AMERICAN HEALTH CARE CRISIS.
This year we get to choose between "Doc" McCain and his "Leeches, bleeding, mercury, and demon expelling" and "Doc" Obama who says "Just take a couple of aspirin for the 437th night and see if your leg grows back by morning.
But "Doc Obama" offers a tax cut while McCain wants to give more money, 7 billion more, to the
foreign oil companies. I take the first!
A very timely article. Isn't it interesting that "they" all talk about the housing bubble ad infinitum re this current fiscal crisis ... yet nobody even mentions the studies (one from Harvard comes to mind) that tell us over half of all mortgage defaults (and bankruptcies) are caused by ... you got it! Medical bills.
It is beyond depressing to hear Obama say that addressing health insurance will probably have to be put off due to this bail-out. No wonder so many of my fellow citizens and I are really ticked off about the whole thing.
It's sacrilege in the U.S. to say it, but not-for-profit health care is our only hope and that hope is diminishing.
eight years ago the national debt was almost brought to zero .
it has since ballooned to ten trillion plus
at 5% interest rate the carrying cost of the debt is 500 billion every year
500 billion would buy a lot of health care but thanks to administration incompetence that share of tax revenue has to be applied to pay the interest on the debt.
500 billion forever---that's george bushes legacy.
no money for health and education 500 billion for interest payments to china and the saudis.
think the bailout will put a crimp in politicians plans , wait till they factor in the interest cost
Again, I say it over and over again, do not blame Bush alone for this disaster.
Remember the horrible energy bill the DEMS passed and were so proud of their
35 mpgs by 2020 and their budget that has surpassed last year's though we are broke!
You have confused the national debt with the deficit, which is the amount added to the national debt each year.
I'm a U.S. citizen and had an appendicitis while visiting for a week in Germany. I went to the doctor and he send me over to a hospital. The total bill for a 9-day stay in the hospital, including surgery was exactly $2,105.
Their medical technology was far beyond anything I've seen in the U.S. I was told that in the U.S. my PPO insurance would have covered me for only 3 days maximum. Don't believe the propaganda coming from the U.S. medical establishment about the pitfalls of changing our medical system.
here, here! We are being fed lies (as usual) and fear is (again) being used as a tool.
I know. I had the same operation at Age 17 and they had me stay in the hospital for 2 straight
weeks. Here you get a triple bypass and they throw you out as soon as you get out from
intensive care with a huge hospital bill that would buy a nuclear weapon LOL.
i forgot to mention: the german doctor, i went to in first place, took half an hour of his time and took care of me, including some german-high-end 3-D medical ultrasonography ive never seen before and a shot of pain-killers. He didnt charge me ANYTHING (ZERO $$$) for that!
I am amazed that no one is talking about how, in January, General Motors is taking away all health insurance for retirees over 65. This is the main reason people worked for companies like this for their whole lives. GM says the 41% of all companies do this and that they will mail something that will help to explain Medicare option.
No one is talking about this.
It isn't just GM, what you describe IS happening elsewhere, and will only continue.
McCain's plan is an invitation for employers to start dumping people or stop providing coverage altogether. I was very pleased to hear Obama's response to McCain during the debate on this issue, and he needs to stay out in front on this.
I hope that in the wake of the current Wall Street fiasco, that people will begin to pay closer attention to the details. Even many staunch Republicans are finally being forced to admit that not everything needs to be deregulated and privatized. All McCain is offering is more of the same.
One thing that puzzles me is the inability or reluctance of Team Obama to point out that the way they plan to pay for Health Care Reform and other programs is by a redistribution of the tax burden so that the top 5% pay more and the other 95% pay the same or less- & then using the revenue that's left over to fund these initiatives.
Every Obama program (including Health Care Reform) is "revenue neutral."
Contrary to McCain's contention - Sen. Obama's plan doesn't raise overall taxes,but instead redistributes the burden to make it fairer.
CLOSING LOOP HOLES SO THAT BUSINESSES PAY MORE THAN 5 % IN TAXES WILL GIVE THE GOVERNMENT MILLIONS OF DOLLARS !!!!!!
WARREN BUFFET SAID HE NEVER NEEDED A TAX CUT !!!!!!!!!!!!!!!
HOW MANY DIFFERENT THINGS CAN YOU ADD TOGEATHER TO GET $700 BILLION ?
How about : 5 3/4 years of war in Iraq = 70 months, $10 Billion a month for the war x 70 Months= $700Billion.
Or : Add up all the profits the Oil Companys have taken out of the Economy + add in all the Profits from the stocks sold off by the Insiders of the companys now going bankrupt and needing a bail out = $700Billion
Funny the Insider Trading was never seen as Illegal since they Nursed the companys along for nearly a year to get past the time limitations where they could be charged with a crime.
Wake Up People !!
John Mccain is no more than an extension of George W, Bush !!!
I don't know anyway this Great Nation and it's citizenry can even hope to withstand another term of this madness Bush and his mandates have crippled the American people with !!
Here in Canada everybody is covered. You don't get treated (or not) depending on your ability to pay.
The system's not perfect. We have fewer doctors than we could actually use, but clinics and hospitals take up the slack. It may take a bit of time to see a specialist, but nobody is sent packing to die or get sicker.
With our health cards in hand we never have to pay to see a doctor, get tests, or treatments. We simply don't have to worry that we can't afford to get treated or that treatment will bankrupt us.
Is that socialized medicine? It may be, but why let a scary word like "socialized" keep everybody from getting the health care they deserve, need, and desperately want?
Yeah, well Americans are burdened with the costs of security and medical innovation for alot of the world. Wheather we or you agree with it, it is our reality. Canadians and Europeans may try to be helpful, but your public services may not be our possible solutions. Your empathy oftens feels more like taunting.
We are a rich nation, yes we have debts, we are in wars against an especially evil tyranny and yet even our allies support is less than enthusiastic. These free countries liberals are the first to legitimise and excuse tactics that are used to oppress, create instability and a lack of security. There are ways you can help others, just speaking out firmly and consistantly would send positive messages of support to the people really suffering from these realities. Your faux sense of your higher morality is f@#$% up ( excuse the french ).
I'm unswayed by your strained rationalization. Other countries have not set our priorities or forced us to make the choices we have. The fact is, we waste huge sums of money on programs that do not improve our lives or create economic security.
Shopping indiscriminately and engaging in far-flung military adventures are simply poor decisions, not moral burdens that we carry for the rest of the world.
What a load of crap. You don't even know what French looks like, let alone are able to speak it. Your kind of misinformation is what it bringing this country down.
Evil tyranny . . . . hahahaha. Must be hard to keep mouthing those republican talking points.
While expressing one's indginant anger and rage at an innocent commenter about "socialized medicine" is about as valid as Sarah Palin is to be "president
It is way past time that the people of my country (USA) get over the brainwashing of the repugnant machine that has browbeat us into this irrational fear of the word "socialize
Socialized is repaired roads and bridges, socialized is a modern air traffic control system, socialized is our education system, socialized is our military, socialized is now our "stock market and banks". That last one should not be on this list, but with the bailout cannot be neglected.
Socialize is just a word. It means the basic service functions of government for the people's welfare. Now why is it that we should socialize private risk and not public?
I am sick to death of repugnant wingnut ideology. It is time for change on a large scale. That is supposed to be the FUNCTION OF OUR GOVERNMENT. It is why we pay taxes. I believe most of us would like a better return on them.
"Faux sense" of higher morality? Won't even touch that one. Either you are part of the problem or part of the solution!!!
We, as does every other nation, have choices., The Republicans are quick to call anything that benefits the little guy "socialism
We are NOT at war with any kind of "evil tyranny" except our own brand. our selfish liars who grab off the top and the absolute fools who are foolish enough to vote for them..
What do conservatives do when THEY have need for public money? All of a sudden it becomes 'an entitlement,' and they are quick to push their way to the head of the line. When ordinary people have needs, the terminally selfish consider it a rip of them.
The problem is that anybody, no matter how temporarily well-off, could suddenly develop needs. A society is supposed to insure that help and security are there for ALL of its members.
Nobody should have to be both sick and broke. Yet here in this country, we have state legislatures opting to pay for care of the indigent off the backs of the sick (by installing a surtax on medical care). That is how low we are willing to stoop in order to pander to the terminally selfish!
"well Americans are burdened with the costs of security and medical innovation for alot of the world"
I'm confused. Do you think that in the US American taxpayers pay out of pocket for a majority of the world's "medical innovation?" ACould you source this, please?
The above post suggest that the US can't afford to provide medical care to its citizens because we are tied up paying for medical research to benefit the rest of the world. That's simply not true-- American taxpayers don't directly fund the majority of pharmaceutical development and medical equipment development. Private companies (who look to develop new products to sell around the world, at a profit) are responsible for a majority of our country's medical innovation.
To suggest that American taxpayers are funding the world's medical innovations is disingenuous.
Voltage wrote: Is that socialized medicine? It may be, but why let a scary word like "socialized" keep everybody from getting the health care they deserve, need, and desperately want?
The answer is simple yet terribly frustrating. Most Americans are stupid. They have been brainwashed to believe that anything carrying the term "socialized" is evil.
The only evil is that corporate America and greedy politicians foster such ignorance.
I've never understood why it is that taxation of some sort geared towards keeping Americans healthy is a greased pole to communism, but paying for cops to walk the beat and working traffic lights is perfectly democratic.
Tell ya what. How about I pay for when my house catches on fire. I get my own fire company to put out the blaze. Should your home catch fire, and you can't pay for your own fire team, well ....
Tough luck. Not my problem.
Right, and you pay less in taxes for that healthcare and you live longer. The drug and insurance companies and doctors associations here are the ones trying to scare Americans from socialized medicince because they've rigged the system to charge more for everything than the market would allow for. The US medical industry takes vulnerable people's life savings and bankrupts them if they are unlucky enough to get sick. They look for ways not to insure those who might get sick and they look for ways to not pay the claims of those who do. The docs get kickbacks for dealing drugs for the drug comapanies.
And Bernstein, I think the reason the race is so close is because people are not stupid and if you look at ACTIONS, the candidates are becoming quite similar. They both just came out with the laughable threat "pay 700 billion this minute or we'll have a great depression
Absolutely right, themainpoint.
Canadian doctors fought hard against Universal Health Care and some moved to the US. What is the difference between filling out Insurance company forms or Government forms. Government means the people so why should socialism scare the people? Take the "ism" away and it is just another form of society. Americans need to lose the fears they have been fed by the Republicans. Look at Canada. Controls on banks were kept and the only downturn will come from the effects of the US economy. Some government control is needed so that the greedy are kept in check. Is that so bad? Why should any person lose their lifesavings because of no watchdog over insurance companies or banks. I have read on the blogs where Canada is referred to as a Communist or Socialist country. Study us,Americans, and you shall see that we are quite free and free of fear.
so does our congress, the house and our senators. Socialism works for them but not for the
people.
You must be logged in to comment. Log in or connect with
