The Crap Sandwich at the Health Care Buffet - The Financial Crisis and Health Reform

It was Republican Representative John Boehner who called the bailout a "crap sandwich", not me - but it's a hilarious image, coming from Republicans who generally support this crap. More important to me is the relationship between the financial crisis and any potential health reform package that might emerge from a new Administration.

Although health care reform will be costly, Obama has asserted that we must find the money to pay for it. It's too important to delay. McCain has said nothing on the subject. Health care costs affect everything about our lives, from the cost of goods we buy to medical bankruptcies to finding a doctor who will accept new patients.

Very few people understand the bailout plan. But the financial crisis is more than just a stock market crash or a bailout for Wall Street. It's a credit crisis as well. It's like the tsunami that hit Thailand - people were standing on the beach staring at the water coming toward them, but didn't run fast enough to get out of its way. This time, apparently, the financial markets and the complicated parts of credit derivatives and bundled mortgages really are a house of cards and are about to come crashing down on all of us. Leaving things as they are is not an option. So there will be a "bailout #2" plan this week, leaving us with huge issues about how to fund the other programs we need to turn the economy around.

So how does this relate to health care? If few people understand the bailout, even fewer understand the impact of health care costs on our economy. Whoever is elected President is going to face some very drastic budgetary conditions when he is elected. McCain has a very radical plan to tax health care benefits and throw people into the individual insurance market to buy their own insurance plans. Obama has a comprehensive health reform plan, but he will have to fight to keep it comprehensive.

Henry Aaron argues in The New Republic that Obama should NOT attempt to pass one big health reform plan right away. Perhaps so, but Obama remains committed to meaningful health care reform nevertheless. In a bad economy, if Obama has to set priorities, what might he do first? I agree with Aaron that a priority should be the expansion of the children's health insurance plan, S-CHIP. This very successful program has reduced the number of uninsured children significantly, and the long term impacts on their health status should be obvious. And Obama should definitely implement the opportunity for people who are uninsured to buy a private plan through the public National Health Insurance Exchange. One of the most desperate problems facing the uninsured in addition to the affordability of health insurance -- is that many cannot even get a policy of any kind because they have some pre-existing condition.

If Obama can provide "guaranteed access and issue" through his public plan and allow people to buy insurance even if they have been sick previously, it would be a huge improvement over the current system. Not only would it reduce the absolute number of the uninsured, it would reduce use of emergency rooms, cost shifts from the uninsured to those who pay, and long term costs to the system that come from people who delay care until they are much sicker.

Jared Bernstein, in a Huffington Post article, notes how McCain's plan would deregulate health care markets like the financial ones, tax our health benefits, and how his subsidy would cover less than that hospital gown they make you wear. Most likely, with the financial system the way it is and the subsidies required to make his taxation of benefits work, McCain's plan would be flushed down the toilet along with the crap sandwich (sorry couldn't resist).

So where does this financial crisis leave us in relation to our hopes for health reform? No matter what happens with the financial markets, we must, absolutely must, start reforming health care so that people can get coverage and not go bankrupt over their lack of it. Obama would be smart to keep his promise to provide health reform. McCain would be smart never to mention his plan again.

Comments

[AllAboutHealthPolicy]

12:22 PM on 10/02/2008

I hope you are right. In many conversations over the last few days with other health policy wonks, it is clear that many are worried that the bailout or rescue will make it impossible to act on health care reform in Obama's first term. He has hedged a bit on this lately. At one point he indicated that it may have to be pushed back because of the economic crisis and at another he suggested that it is an important part of economic reform. I understand both views. At this stage, given the financial meltdown, it may be increasingly difficult to argue effectively that we can take on national health care reform. But the more important point is that Obama's plan is the one that will bring Americans relief in terms of their access and cost to health care and potentially the quality of that care. McCain's plan just would make everything in health care even worse than it is today. Health care reform YES. When? That is the question.

[JulesD53]

11:52 AM on 10/02/2008

The financial crisis is undoubtedly huge, and as distasteful as it might be to have to borrow $700 billion (although that is not at all certain from what I know) we can at least do that if we have to. Ignoring the twin crises of Health care and Social Security will ensure that in a couple of decades we won't have that luxury. We cannot afford the cost of delaying a fix. Senator Obama has said that it might take longer than we would like to get there given the current mess, but he should be congratulated for pressing on. Senator McCain, on the other hand, continues to think that letting people in New Jersey buy insurance in Arizona will have no effect on the cost of insurance in Arizona- an idea that completely ignores regional differences in health, the intensity of health care provided, and the costs of providing care, not to mention the effect of economic markets.

[vivisel]

02:25 AM on 10/02/2008

health care is an economic issue - it's about productivity. no question about it.

[edla]

09:11 PM on 10/01/2008

Regardless where he starts, when he starts or the scope of his inital actions, Obama's strategy for tackiling the health care problem is the right strategy. He may, indeed, have to scale back or delay implementation of some of his plans, but the fundamentals of his plan are strong and will guide us in the right direction.

McCain's plan, well, is more crap sandwich. Thanks, but no thanks on that.

[Homebirther]

07:04 PM on 10/01/2008

Compreshensive health reform is what this country needs. The U.S. is the only industrialized nation to not offer health care to its citizens. We are also one of the few that have left covering Americans up to the private insurance market to the detriment to our health as well as our pocketbooks. Vast amounts of money are made in the sell of health insurance and CEOs of insurance companies are also highly compensated (millions of dollars a year, some as much as $124.8 million, including salary and exercised stock options) (Source: Modern Healthcare 8/1/05:7 and New York Times 4/3/05:Bu6). It is sickening that while people are dying and going bankrupt to pay for medical care, insurance company CEOs are making millions. We seriously need to reevaluate our priorities and choose differently.

[Harold Pollack]

03:37 PM on 10/01/2008

if the economy tanks, this will be a huge problem. But I don't see a bad economy as a reason to go slow on an ambitious health reform agenda. The number of Americans who become uninsured (or who face the risk of becoming so) will jump. So will the number of people facing serious medical bills. At the same time, state budgets will get hammered from increased Medicaid burdens and from reduced revenues. I leave the politics to others. It seems crazy to take ambitious health reform off the table on the grounds that "there is no money" at such a time. We are finding $700 billion right now.