The True McCain Health Plan: Wealth Transfer From Voters to Corporations
Health policy proposals can reflect many different ideologies or political philosophies, but John McCain's plan isn't so much ideological as utilitarian. There has been a lot of excellent analysis of it in recent days, but one critical aspect has somehow been overlooked: The McCain plan, if enacted, would result in an enormous transfer of wealth from the general public to large American businesses.
In that sense, it reflects a lot of what passes for "conservative" ideology nowadays. There is no underlying belief system, just a mixed bag of policies - some "pro-big government" and some "anti big-government" - that share only the ability to enrich the large corporate donors that finance Republican campaigns.
So Republican political platforms are often little more than ideological smokescreens for policies that benefit these special interests. That's why large corporate donors support think tanks that do nothing but cook up these kinds of proposals. The "maverick" McCain is now a strict adherent of this pseudo-conservative line, and his health plan reflects that. It's pro-free-market where that benefits his party's backers, and anti-free-market where necessary to provide the bill with enough political cover to be palatable.
(I don't usually sound so populist when reviewing health policies. But it's good to look at what a plan would actually do if enacted, rather than what its backers say it would do, and this is what was most striking.)
How would this transfer of wealth take place under the McCain plan? First, its important to note that most under-65 Americans with health coverage receive that coverage through their employers. The employers who provide health benefits aren't small businesses - they're medium to large companies. While these companies receive a tax break for providing coverage, it isn't enough to cover their costs.
What would the McCain plan do for them? First, it would destroy the employer-based system by eliminating tax breaks for companies that offer health care. As a result, nobody would have employer coverage anymore. Since businesses are paying far more in premiums than they're been getting in tax breaks, they'll save an enormous amount of money. But unlike Sen. Ron Wyden's plan, for example, the McCain plan would not require these employers to give this sudden windfall back to their employees as salary increases. America's businesses would enjoy a huge reduction in expense without being asked to give anything back.
In return, individuals and families would be given tax breaks to go out and buy their own health coverage, but without the buying power of larger employers. So here's what's likely to happen in the real world under the McCain plan, based on what we've learned so far:
1. If a family gets a $5,000 tax break but the typical family premium is $12,000, they'll either pay $7,000 out of pocket or go without coverage.
2. People with pre-existing conditions won't be able to get private coverage.
3. McCain will encourage the states to take on people with pre-existing conditions by creating "high-risk pools."
4. But high-risk pools at the state level haven't worked very well. So people with pre-existing conditions will either go without insurance, remain uninsured, or state taxes will skyrocket to cover their costs. That means even more money out-of-pocket for individuals, in the form of higher state taxes.
5. Cost controls on premiums are sketchy. That means the $12,000 average premium will probably go up, too.
The end result? More out-of-pocket expenses for individuals, terrible difficulties obtaining coverage if you have a pre-existing condition, and an enormous financial break for larger American businesses.
This plan is more likely to pass than previous Republican proposals, since it includes high-minded suggestions like that state-based "Guaranteed Access Plan" for high-risk people. But if you've seen how expensive and unwieldy state risk pools can be, how difficult they are to join (six-month waiting periods, etc.), and the limits to their coverage, you know it's a plan that provides very little for "the least of us." Not only that, but by insisting that these high-risk state plans work with insurers, McCain would ensure even more transfer of public revenue to the private sector.
"Guaranteed access" and the other, more palatable plan provisions are left vague, while the windfall effect for business is immediate and specific. The plan would, in the words of Popeye's pal Wimpy, "gladly pay you Tuesday for a hamburger today."
That's enough to persuade The Politico and other observers that McCain is "moving to the middle on health care." And since politics is a game of expectations, that may be enough. But underneath the centrist rhetoric, the McCain plan will gladly help voters "Tuesday" while it empties out their pockets to give corporate interests a big hamburger today.
________________
Here are some interesting reactions to the plan from across the political spectrum:
Ezra Klein - I particularly enjoyed his "It's 3 AM and your child is sick" opener.
Jonathan Cohn - Perhaps the best overview of the plan I've read.
Race 4 2008 - Review of McCain conference call on the health plan.
Megan McArdle - As she says, the plan is "heavy on theory and light on practice." And in my experience, where a plan is light on practice nothing is going to happen.
Bob Laszewski - Good suggestion about means-testing for that tax break.
Bill Scher - As Bill notes, only a few journalists have written about the radical nature of the McCain Plan.
Joe Paduda - He observes that the McCain plan costs more than either Clinton's or Obama's, but would insure fewer people. Why is that? Because this plan isn't really about health coverage, it's about wealth transfer ... that is, if you judge it for what it does rather than what it says.
Blogs:
The Sentinel Effect: Healthcare Blog
Follow RJ Eskow on Twitter: www.twitter.com/rjeskow
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
McCain's solution is typical of the "free market" republicans. I don't understand why we Americans can't see the error in this approach. In a free market system if i produce a product and it is better than my competition, the consumer has the option of buying my product or my competitor's product or neither. When a person gets sick they have no options, they have to see a doctor independent of any health-care provider, so the health-care provider has no product. Now if there exist 100 heath care providers with no product how do they make money? They have two choices, they can provide a better product, but they have no product they can't treat you illness, so the other choice is limit how much they pay the people that do have the product (the doctors) or limit how much they pay out by deigning claims. We have 100 CEO's making large sums of money trying to figure out how to pay doctors less or how to deign claims. All of them do the same thing and none of them contribute to the real problem of curing the sick person. Doesn't it make sense to have one organization to administer this plan and control how much money that organization can make. We use to do this all the time, a classic example was the telephone company and the service was excellent. Also most utilities are regulatored so it can be done.
McCain's solution is typical of the "free market" republicans. I don't understand why we Americans can't see the error in this approach. In a free market system if i produce a product and it is better than my competition, the consumer has the option of buying my product or my competer product or neither. When a person gets sick they have no options, they have to see a doctor independent of any healthcare provider, so the healthcare provider has no product. Now if there exist 100 heathcare providers with no product how do they make money? They have two choices, they can provide a better product, but they have no product they can't treat you illness, so the other choice is limit how much they pay the people that do have the product (the doctors) or limit how much they pay out by denighing claims. We have 100 CEO's makind large sums of money trying to figure out how to pay doctors less or how to denigh claims. All of them do the same thing and none of them contribute to the real problem of curing the sike person. Doesn't it make sense to have one organization to adminstor this plan and control how much money that organization can make.
In a previous post I already discused the flaws in this "Plan" which seems to have been devised by someone not smarter than a 5th grader. If this "Plan" does indeed become law, an unlikely occurance, it will be yet another spike in the decaying coffin of free market healthcare; a coffin that a bloodsucker like Count Dracula would have sense enough to avoid.
Healthcare should be a non profit, non taxable organization like churches. Doctors should decide if they want to be in their own private business or if they want to be paid a base pay. Very few doctors believe in the hippocratic oath now days,
A World of Thieves
ibsteve2u said Repubs are thieves in suits, I would go farther quoting HS Thompson, "In a world full of thieves the final sin is stupidity."
Some think it is getting so bad that we will have a revolution. I disagree, I think the most we have is a silent revolution of those who understand that White Collar thieves, White Collar Drug Lords, WC Oil Tycoons, WC Mortgage Moguls are promoted and revered in this country, effectively bailed out by the Fed in terms of Bear Stearns or given millions of dollars in the case of Countrywide Mortgage's CEO, for putting our financial system at risk.
Many will continue to go without health insurance with the deductibles and premiums climbing or being rejected for pre-exisitng conditions. Or work the tax system thru lower capital gains taxes or falsely claiming earned income credit. Or continue to take Lobby money from the aforementioned White Collar Thieves, becoming Political Thieves themselves. Nobody wants to be the smuck, the looser who doesn't understand how to work the system to their benefit.
And those who don't know understand, graduates of a "No Child Left Behind" Education System, will live in fear, like the financially struggling woman with the Flag pin as her issue. They will continue to be the puppets of the White Collar World of Thieves.
This article reinforces my hope to have the oportunity to vote for Nader.
Deenis Kucinich & Michael Moore had the only "real" healthcare solution. There's would not bankrupt the system, it would encourae prevention & "cures". See the movie "SICKO" TO UNDERSTAND HOW MUCH CHEAPER & EASY IT IS TO IMPLEMMENT in 38 other countries. As for waiting too lon, it's been over 6 years and I'm still waitin for an x ray on my fractured wrist, & a MRI on my torn rotator cuff.
I also have GEICO car insusrance, who denied every claim I made from a car accident, which forced me to use the horrible system we have. There is no real Insurance out there anymore in America. It's all a scam to sell drus. Doctors are not allowed to "cure" anythin. They are told to teat symptoms with drugs or do surgery to make big bucks for the pharmaseutical companies & keep you out of the job market. That's the real reason our system is costin so much.
Please don't. These are serious times and no time for a perennial loser. Ralph Nader may be a nice guy, a populist and I like many of his ideas but he won't win. He will divide the vote and give McCain a better than even chance to further the Bushlevik's agenda. Remember Al Gore.
America needs, very desperately, a Democratic Administration and a Democratic Congress, neither of which will continue to pander the corporations. Your Nation's future will depend on your vote, now in 2008, more than any other time. Your future and well-being physically, psychologically and financially depend on a Democrat as Commander-in-Chief.
No Party can cure all the Nation's ills, but Republicans neither care nor try. With what we have now, I don't think there are many rungs left in the barrel before we reach the bottom
Yeah, I know it sounds radical, but radicalism in the fight against tyranny is not misplaced.
siegfried89, I agree but have to add the the people themselves need to be MUCH more active, observant, and demanding of those who are supposed to serve us. The criminals in the White House today are not being brought before courts of law and tried for their crimes against humanity in general and this nation in particular because the people have not INSISTED that this be done. I am aware that too many people are too worried about bills and the cost of living to have the energy to kick up a stink about the situation, but THIS IS EXACTLY WHAT THE REPUKES WANT! If the people are stressed to the max with the daily basics they will not have the strength to fight those who seek to steal what little they have left. Already we are at the point where most single women or a family making less than the so-called "average" annual income cannot afford to buy a home. Rents are ridiculous, and tenants are not allowed to live, they must exist under someone else's heel. The transfer of wealth is an obscenity and so is the fact that news media make NO COMMENTS ABOUT MCINSANE'S STUPIDITY & RICH-PANDERING.
Bob Herbert's article (today-NY imes) very neatly outlines the idiocy of " consertive positions" on the important isues facing us and today's Post reinforces just how much nonsense is floating around in this unfortunate campaign. Very depressing.
Being rich and already having healthcare on his job, McCain doesn't really have to care does he??? The little people are the ones who will pay for this stupid plan that in the end will cover no one, and those that had healthcare from their employers and don't now will be out in the cold thanks to McCain on this thoughtless plan. But what the hell, he is rich, and why should he care????
One thing you can depend upon: When you see "Republican", think "thieves in suits".
So is clinton's. Keeping in mind requiring another 50 million people to buy health isurance from corporations is a massive economic boon for those companies. Then we get an as yet unnanounced tax discount for doing so which hopefully covers the cost at least initially.
The clinton record on health costs is as bad as bushes.
Healthcare Costs
1993 Per Capita Healthcare costs = $3,469
2000 Per Capita Healthcare Costs = $4,790
Increase% - 38%
2001 Per Capita Healthcare Costs= $5,148
2006 Per Capita Healthcare Costs= $7,026
Increase%=36%
Data Source = http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf
Growth percent calculated
Unfortunately 1992 baselne for clinton wasn't on tha table nor was 2007 for bush. I'ld say the clinton record on healthcare is as bad as bush's and as I note above she also transfers wealth to health insurers.
At least obama lets us choose not to buy should the incentives not mesh with cost although his is also a wealth transfer to insurers.
You know what the CIA said in the 1992 Worl Fact book about the challenges to the US economy.
“Ongoing problems for the 1990s include inadequate investment in economic infrastructure, rapidly rising medical costs, and sizable budget and trade deficits.” CIA World Factbook 1992 – US Economy
lets not begrudge a dollar earned ...
i certainly dont want a total paid for government tax dollar health care program....i dont have that many dollars to hand over to the feds ... a market based health care reform is always more efficient and better service resulting in better care.
One good thing in McShame's proposal: pretty soon no one will be able to afford health insurance and the health insurance industry will go broke from lack of customers. Or at least I can hope, but they may be given another government bailout....
Here's a health plan that preserves the private sector, insures everyone, and provides for a moderate degree of cost controls.
The Dept. of Health and Human Services, authorized by federal law, writes a health-insurance policy (structured similar to United Health, Cigna, etc, with coverage for prescriptions, preventitive care, pre-natal, disabled and elder/long-term care). The policy is THE ONLY HEALTH INSURANCE POLICY health insurance companies nationwide can offer, and with no modifications, no declines, and no one written-up. Health insurance companies could compete only on the basis of their premiums and the efficiency of the operations; not by denial of care. Other than writing and occasionally revising the policy, the only role for the federal government (no role at all for the states) would be to subsidize premium payors, on a sliding scale, thru the income tax system.
The system would be self enforcing. Health-care providers (doctors, clinics, hospitals) would enforce insurance company compliance thru lawsuits; the governments would not have to have an enforement role. The affluent would pay the full premiums; with declining percentages as for less affluent patients.
Prescription costs and medical technology costs would be controlled by the policy established recompensation to the pharma/tech companies.
Tell me what is worng with this? Please. I have yet to see one serious valid economic or structural criticism of it.
SG, I think the research done by this articles author makes it clear the states will be responsible for pre-existing conditions; which could leave many in the cold for a long time. Self enforcing? You've got to be kidding. We tried a self-enforcing banking system (twice). Didn't work out so good either time. Nobody on the top of a corporation cares unless they are dictated too care.
Quote " Nobody on the top of a corporation cares unless they are dictated too care. "
Nobody in government cares, as they just call in the police to enforce rules that are heartless.
I'm sure you can read, so the reasons you would express what appears to be stupidity are your politics, selfish, oblivious, and just plain mean and your income, which is probably best described as a windfall, because the only thing you could bring to any business is greed.
Your response seems to be an automatic knee jerk response. While there may be problems with the idea, your post doesn't counter anything about the idea, just spouts off your preconceived views that everyone is greedy.
This will not work using individual policies because people who are healthy will avoid it if they can find something cheaper and people who are sick will buy into it if the cost is within their ability to pay. Therefore, companies will have to charge a rate comensurate with the individual's medical record . Once a policy is written it cannot be amended for any reason (no tiers for expensive drugs).. Companies will not buy into this because their sole purpose is to make a profit, not provide care
Their rating structures will be no different than they are today. The rates for persons in good health will be a standard rate varying only by age, deductible and copays assuming all the benefits are standard and mandated. The rates for uninsurables or persons with pre-existing conditions will require moon money much like the assigned risk pools available in many states. These rates are so high only affluent people can afford them. So where does that leave the average person with a chronic disease who was part of an employee group with full coverage paid for by his employer and a small personal contribution? Most likely he/she will be facing bankruptcy.
The answer is a non-profit single payer and low administrative costs which are now 30% of everyone's bill..
It's a crisis man and it can't be solved by whimsical plans like those proposed by John McCain. No more band-aids, this wound is hemorrhaging.
Fellow, Society of Actuaries
Senator McCain admits economics is not his strong suit and promises study in that area. By his arguments on healthcare reform, I suggest he find healthcare advisors inclined to facts and unbiased analysis. In doing so, it would evidence why his lifetime government healthcare coverage including as a Senator, excepting while under his Hanoi jailors, is an ideal option for the nation. Moreover, contrary to popular belief, US healthcare delivery and insurance operates outside the perfect competitive economic model. By examples, first, the unequal market power of Medicare generally establishes medical reimbursement rates nationally. Secondly, healthcare employee wages are set by disproportionate market power exerted by medical providers over them. Thus, US economic model better fits an imperfect competitive economic model, already behaving more like a single buyer or seller proposition.
That said, Senator Obama and Clinton proposals are similarly free-market forces based healthcare financing, with or without individual insurance mandates. Beside US Medicare successes, and many exemplary experiences witnessed in other leading industrialized countries healthcare provisioning with higher government involvement, it is highly disingenuous at best to argue against a national extension of the healthcare plan all three senators enjoy. More so if the desired objectives are: a. Access for everyone, b. Improved quality medical/oral care including incorporating integrative wellness care, c. Stem the growing inflation in healthcare costs, d. Accommodating net population growth, e. Reducing unnecessary administrative paperwork, f. Lowest national expenditures, g. Maintain international competitiveness. h. Reduce the unsustainable US$50,000 national debt level per American.
The Iraq war is for oil and It is also continuing so that Halliburton can keep making his billions. Take him out of the picture and we'll see how long the war lasts. Money is some people's GOD. It matters not that the youing people are being killed off. The government is calling this a noble war. However; it
is not a war the rich want their kin to fight. Just let the poor and uneducated die. If we had a country where all could have higher education and could think better and make better decisions the blue collar workers could become a more intelligent group and able to think for themselves and
wouldn't be taken in by those who really think of them as "shit" but use them for their own political
purposes.
What does this have to do with health care???
But, since you posted...I would like to clarify...basically what you're saying is...the war is being continued so our tax dollars can pay Halliburton...our young, hard working men and women in the military, who put their lives on the line every day and who've lost their lives, are poor, uneducated, unrespected, can't think for themselves, or make a life altering decision for self preservation, are doing their job so some rich kid doesn't have to fight...AND...the average worker in this country is also poor, uneducated and can't think for his-/herself; and better yet is a complete moron and a puppet for every politician standing on the corner?
WOW!!! And I thought there was so much more to it! Thank God I have you and you're truly intelligent insight to open my eyes and bring me out of the darkness! To think...I have been an uneducated, penniless lemming, led around by my winkle for all these years??? I just don't know how to thank you!
Oh yes...most importantly...taking Halliburton out of the equation will absolutely bring the war to a screaching halt! Without out all the money he's shelling out to keep the war going I don't know what we'd do?!?
Shackelford, Rusty Shackleford, for President!!!
What's interesting is that McCain's plan continues the 3rd Worldification of the US for the benefit of corporations. The outsourcing of jobs to other countries occurred because those countries allowed their people and their land, water and air to be exploited by the corporations. GM claims that the cost of health care ups the price of each of their cars by $1400. The major US automakers cited potential losses for years if they had to meet higher mileage standards. They decry environmental laws and worker safety laws.
My point is that instead of meeting higher standards, these people have brought us down to the level of 3rd world countries in order to make us competitive at the LOWEST possible cost. In the meantime, they've done everything they can to attack governmental regulations.
These regulations were hard fought to begin with and were in place to protect our foods, medicines, workers, environment, and the financial health of the country. But the laws have been removed and now see what we have. Our very lives hang in the balance - and McCain - in his doddering way - proposes a health care plan to wield the final blow to American workers. American workers are American consumers, don't the Republicans care if they're killing the Golden Goose? Is control, absolute control, really what's most important?
Government is bad when it makes them protect us and our resources, but BIG GOVERNMENT is good when it increases wiretapping, wars and huge sustained presence in other
Is this supposed to come as a surprise? Will Hillary become his running mate after the democrats dispose of her properly? We have come to believe that revolution was the only way to change a government that has become blind to the needs of its own people. America deserves better than we are getting so does our people. Obama scares Washington insiders that makes me think he is going in the right direction. Too bad so many people including me believe that the government controls the election results and the winner is predetermined behind closed doors long before the so called election is held. I am sorry if i sound like paraniod, but why would anyone want 4 more years of Clinton, unless it was to keep the election close so no one will notice a small shift in votes.America is very top heavy and is destined to topple, remember our military have seen how government takes care of its Veterans.
You must be logged in to comment. Log in or connect with
