McCain's Health Care Plan Radically Irresponsible

What a disappointment. Here Barack Obama accuses John McCain of pushing a "radical" health care plan, and instead of grabbing the chance to don a scarlet "R," the would-be change agents of the McCain campaign bristlingly respond with business-as-usual. It is Obama, they say, who harbors secret ties with dangerous bomb throwers.

In reality, you don't have to be a health-care expert to immediately understand just how fundamentally radical the McCain plan is. Whether or not you are a fan of free-market health care, what is it if not radical to propose dismantling the employer-based insurance structure that covers 150 million Americans and has been the foundation of our health care system since the end of World War II? Before the war, about 10 percent of Americans had health insurance. By the mid-1970s, 90 percent did.

By comparison, the Clinton administration's much-reviled plan of the early 1990s looks like mere tinkering, albeit tinkering that came with a 1,000+ page instruction booklet. The McCain folks have certainly learned the virtues of vagueness. Their plan does not trouble itself with much detail beyond "take apart group coverage, elevate individual coverage and trust that the whole thing puts itself together again even better than before." In other words, this is faith-based economics for a stunning one-seventh of the U.S. economy.

To put the $2.4 trillion spent annually on health care into perspective, it equals three-and-a-half Wall Street bailouts all strung together. It is an apt analogy, since McCain says that health care is plagued by an excess of regulation and a surfeit of free-market competition. Not surprisingly, fervent ideologues of the far right believe they have found a fellow traveler, and they don't shy away from the "r" word.

As an op-ed in the ultra-conservative Manchester (NH) Union-Leader noted back in July: "Sen. John McCain is proposing...[a] radical overhaul of American health-care policy." Author Michael Tanner, a senior fellow at the libertarian Cato Institute, concluded that it is "a radical change, and it is right."

Apparently being called a radical rightist is OK as long as only other radical rightists hear about it.

Yet radical change can sometimes be a good thing. Worse than being radical is being irresponsible, and the McCain health care plan is just plain sloppy.

Let me explain. There is a cogent argument to be made from the right for blowing up our current employer-based system, just as there is a similarly cogent argument to be made from the left for doing the same thing by adopting single payer. Republicans from Bush, Cheney and McCain on down have regularly and inaccurately tried to scare voters into thinking that any health care reform plan proposed by a Democrat is part of a (radical) single-payer plan, but that is a discussion for another time.

Genuine single-payer advocates that I know have a thoughtful and detailed plan for implementing their vision. Similarly, there are conservatives who have thought through the appropriate role that government regulation and subsidies must play in ensuring that people who have a pre-existing condition such as diabetes or cancer are not abandoned in the marketplace. The McCain plan, however, does not reflect those deliberations.

Unlike Obama, who made health care reform a cornerstone of his campaign - and who has been deeply involved in the issue since his Illinois Senate days - McCain has made health care an afterthought. While Democrats squabbled in their primary over the details of covering the uninsured, McCain laid out only the barest of health reform proposals, and nothing for the uninsured, until after he secured the nomination.

The current McCain plan makes no pretense of taking more than a preliminary step towards covering the uninsured, even though there are plenty of Republicans who could help him go much further. As a recently released report by the Commonwealth Fund put it, Obama's plan would cover 34 million of the nation's projected 67 million uninsured people in the coming 10 years, compared with just 2 million covered under McCain's plan. And that's over an entire decade!

McCain's math on the subsidies needed to help those with pre-existing conditions afford insurance ludicrous, and the heart of his proposal - that it effectively addresses the overriding problem of cost - is hollow, even when taken on its own terms.

What is most frightening about the McCain plan, then, is the way it reveals a reckless man who can't be bothered to learn the details about the havoc his ideological obsession will wreak on the innocent bystanders known as the American people. If that's not the definition of a bomb-throwing radical, I don't know what is.

Comments

[jfrusch]

There is a REAL difference between the two proposals. I wanted to walk through some of the financial aspects that have not been discussed. McCain's proposal will tax any health care provided by employers as if it is income. You don't get the money but it is treated as if you did.

For example -
you are a single person who earns $30,000 in taxable income.
you have employer-provided health care - I will set this value at $6,000 per year [about average]
Your new taxable income total is $36,000
Your new tax rate is 25% instead of 15% - yep, it goes up 10%.
How does that impact you?
before - the income tax would have been 15% of 30,000 - $4,500
after - the income tax would be $9,000 - 25% of $36,000
the tax credit from McCain is $2,500 for a single person
Your total income tax goes up $2,000
You also pay more payroll taxes - 6.2% for Social Security and 1.45% for Medicare [no limit]
Your additional payroll tax is $459
So for this change that is supposed to HELP, your taxes go up by $2,459.

If you are single and make $250,000 - you will end up getting a tax cut of $433. That is who McCain helps.

[JulesD53]

I agree with Millenson that McCain's plan is radical and dangerous. It is a further example of his failure to consider all of the consequences. There is no question that employer based insurance has a problem- it is not "portable" and there is an incentive to have overly rich benefits. In proposing to replace employment based insurance with individual coverage, though, McCain creats a panoply of bigger problems. First, the refundable credit will not cover the cost of coverage for people with chronic conditions, and many of them will forgo coverage. Second, the credit will unlikely cover the cost of coverage that includes maternity care for young women, and without a mandate many of them will also take their chances. The only expansion in coverage that I can see is single young men who can get coverage for less than $2500/yr. And on top of everything else are the proposals to relax regulation and pay for the whole thing by cutting Medicare spending. We can do a lot better than this.

[Bwatt]

Senator McCain's health plan is also just poor economics. A recent analysis of the McCain and Obama Health Plans by The Lewin Group showed that McCain's plan would result in a reduction in uninsured of 21.1 million people at a net federal cost of $2.05 trillion dollars. Senator Obama's plan would result in a reduction in uninsured of 26.6 million people at a net federal cost of $1.17 trillion dollars. Let's see. More people at less cost vs less people at more cost. You don't need a degree in economics to figure this one out.

[QualityCounts]

McCain's campaign is a little like groundhog day. He goes to sleep and dreams of successfully invading a small hapless country, but wakes up each morning to discover that it's all about the economy, health care, education, and all those other issues that completely mystify him and his running mate. So he tries another Hail Mary, gets it all wrong, and has to do it all over again the next day. I think McCain is wishing for November 5th almost as much as is the Obama team.

[biglebowskiny]

Please help me out here.......The current federal tax rate for a person making $50,000 is 15%, which means this individual is going to $7,500 in federal income tax. Now, I don't think the McCain plan is going to then give this individual a $5,000 refund to pay for health insurance. What I believe it does is tax you at $45,000, meaning you'll have a true tax savings of only $1,250. Either way the individual or family gets hosed because decent health insurance for an individual is about $500/month.

Can someone please elaborate and clarify for me.

[jfrusch]

Your point overall is valid - health care cannot be purchased at the $2500 per individual and $5000 per family - without including high front-end deductibles that will require the patient to pay everything. Individual coverage close to what employers provide is at least $6000.

However you quoted a 15% tax rate on $50,000. This is true for married filing jointly but the tax rate for a single individual would be 25%.

The McCain proposal does reflect a true credit - the amount comes off the tax you owe as if you paid it. Trouble is you add the employer value as if you earned it - assuming your employer keeps the health care plan. Your tax rate can increase if you are near the next tax bracket - increasing taxes on all of your income. To see if the plan costs you or saves you you need to
start with the credit - either $2500 or $5000
subtract off the extra cost of the income tax
subtract off the extra cost of the payroll taxes
subtract off the additional taxes if you change tax brakets

If you couldn't afford to purchase health insurance you still can't - the credit doesn't come in advance - you get it after you have paid for the 1st year of premiums - then you get the tax credit as part of an income tax refund.

[ARTHURLEVIN]

Senator McCain's plan appears to rely on alchemy. How else can $5,000 turn into $12,000, the cost of average health insurance coverage for a family these days - with many facing even higher premiums. So families would be out of pocket $7,000 - is that good for the middle class and working poor? In case he hasn't noticed such so-called consumer-driven health plans (HSA's etc) haven't exploded as predicted. If they are so attractive why has the market not embraced them?

[jfrusch]

Consumer-driven health plans and other plans that have high front-end deductibles already have proven to cause people to delay seeking medical treatment. This increases the total cost of health care - it always has.

We need real solutions that examine the overall system. Even Obama's plan relies on insurance and insurance companies - allowing them to remain for profit.

At least with Obama-Biden, you can be sure we will have dialogue about what the final, best approach is that will encourage diverse opinions to build the best approach.

Health care isn't a good candidate for the free market system - and we don't have anything close to free market with the current model.

[SteveMDFP]

No civilized society leaves the provision of vital services to the free market. Folks on the right who whine about "government-run health care" seem never to stop to think that we have government-run defense, police, fire services, and K-12 education. These are all "socialized," and nobody seems to object.

Government-run healthcare in the form of Medicare, Veterans Administration, and military health care all tend to run much better, and more cost-effectively than private-sector health care. Extend care under similar terms to everyone, and the savings over the status quo will be more than enough to cover the uninsured. And nobody will have to declare personal bankruptcy because of medical bills.

McCain's utter failure of vision in this crucial challenge is his fatal flaw.

[odyssey58]

If the free market could solve the health care problem we wouldn't be having this discussion. It will take an act of Congress to make health care more affordable and available.
My family is uninsured. Fortunately, we are all very healthy. But we can't seek treatment for anything even though we could afford it because then we might not be able to be covered in the future.
During his 60 Minutes interview Obama proposed exactly what would work for our family. Allow people to keep their private insurance if that works for them. The rest of us could buy into government health insurance with premiums based on a percentage of your income rather than income ranges which discourage people from working extra hours if it could cause them to lose coverage.
Some don't like the idea of a "government bureaucrat" making health care decisions. I would rather a fairly paid bureaucrat who receives no bonuses based on how much health care he denies than a grossly overpaid insurance executive who get bonuses based on how much money he saves the company by denying coverage. To me it's a no-brainer.

[fnnkybutt]

I couldn't get health insurance at all, even though I could afford it, due to pre-existing conditions (migraines). Good blood pressure, low cholesterol, no family history of heart disease or serious cancer... but because I take a pill for a headache a couple times a month, I couldn't get insurance.

So, explain please - How is Mc Cain's $5000 going to help me?

[anothervoice2]

The truth about McBush:

http://www.rollingstone.com/videos/player/23356460

http://www.rollingstone.com/news/coverstory/make_believe_maverick_the_real_john_mccain

[blueshield]

As the WSJ reports, Mc.Cain is being hush about their plan to cut up to $1.3 trillion from Medicare and Medicaid to pay for his plan.

Cuts in Medicare and Medicaid services.

At the same time senior retirement savings are evaporating.

Get the word out to Florida. Get the word out.

http://online.wsj.com/article/SB122315505846605217.html?mod=special_page_campaign2008_mostpop