I sometimes write two different versions of pieces, one for you wonks at THCB and one for the more general crowd at Spot-on. Well to be more accurate I write one version which gets edited heavily over at Spot-on, so today here I’m putting up the THCB version of the one that went up on Spot-on yesterday.
My 6 weeks of traveling the world on an extended honeymoon is over. Thanks very much to Brian Klepper and the cast of thousands who’ve been keeping THCB rolling excellently while with my lovely wife Amanda I’ve been diving on coral reefs, sleeping under the stars with the Bedouin, exploring 3,500 year-old tombs, watching Lions tear apart a buffalo, and tracking chimps hanging out in the rain forest. (Pictures of all this and more to come, I promise)
So what better way to return than to enter the jungle of US Presidential politics? Yesterday I sat in on 2 conference calls. One from the McCain camp on their man’s health care proposal, the other from the Campaign for America’s Future, which is promoting Jacob Hacker’s plan as the theory behind both Clinton and Obama’s policy intentions. It wasn’t pretty.
McCain’s proxies were Douglas Holtz-Eakin, sensible former CBO director, and Carly Fiorina, the fired HP ex-CEO who has been rehabilitating herself by taking credit for her successor’s success, and been hanging out on the McCain campaign as adviser for tech. Apparently she’s on the VP shortlist, and if so, we got a lot of taste of what we can expect. The choice is between free market choice, and the government telling your family which doctor it can go and see. Yes, you’re going to hear “government run heath care care” alot as if we’re all moving to the Gulag.
(Carly also made an amusing slip when she said that McCain favored importing of generic prescription drugs. Generic drugs are of course usually cheaper here—it’s re-importation of branded drugs that McCain supports, which will lose him the odd contribution from PhRMA).
But no matter competition and choice is always cheaper—trust her. But then again Carly knows all about succeeding in the free market, right?
After a lot of platitudes about medical homes and transparency and
EMRs—all of which will magically appear under the McCain plan,
Holtz-Eakin finally got down to the meat. The idea is that we’re more
or less ending the employer-based system by taking away the tax
deductibility of benefits. Every family will get a $5,000 tax credit,
and use that to go buy insurance in the individual market, in which
they will no longer be restricted to buying insurance their own state.
At least Holtz-Eakin is sensible enough to get McCain to identify the
problem associated with the main thrust of his plan—what happens when
people are forced into the individual market.
The answer of course is that under such a system most healthy people
will find a high deductible policy that costs less than $5,000, and
those with pre-existing conditions, such as John McCain (were he not a
Federal employee and eligible for Medicare) would find insurance unobtainable.
There is a rational way out of this for those (including me) who
want to hasten the end of employer-based health insurance. You set up a
regulated national insurance market which forces insurers to take all
comers much as the Dutch have done, Massachusetts has made vague
efforts towards, and (of course) Ron Wyden proposes. But to do that
without killing the insurance market requires forcing everyone to buy
in (as Arnold Schwarzenegger understood), and also means that benefits
and options have to be made similar by regulatory fiat, and that a
system of risk adjustment needs to be in place. Failing that the whole
thing collapses, as the absence of an individual market in any of the
semi-regulated states like New Jersey, or Washington demonstrates.
There’s no reason that McCain couldn’t have gone some way down that
path. After all Wyden’s got a bunch of Republicans on board, and even
Reggie Herzlinger (yes I know I spell her name wrong but so does she!) proposes some form of that.
But instead McCain’s answer to that problem is literally, “we’ll
study it more”. Holtz-Eakin suggests that there are some states which
have a solution to the high-risk uninsurables via their high-risk
pools, and that this can be adopted nationwide. This is probably news
to anyone in one of those pools. For example, just yesterday at the
Texas state house a mother called Kyla was making this speech
about how to get her sick child into the state high-risk pool, her
husband is going to have to take a pay-cut! Go read her story. And then
of course think about access to those pools when multiplied by
thousands of new applicants under the McCain plan.
This of course should be hay for the Democrats and the AFL-CIO and
Campaign for America’s Future were very persistent in letting you know
that 1) McCain wants to take away employer-based health insurance and
2) you’re on your own in the individual market. Funnily enough in the
call yesterday they focused on point one, rather than explaining the
obvious about point two—the individual market is run by insurance
companies in California that retroactively cancel all sick people’s
policies, and that under the McCain plan that’s the only place you’d be
able to buy insurance! But I’m sure we’ll hear loads more about that
come the Fall.
And who’s the politician in California who’s been most aggressive
about pointing out the flaws of said insurers? Yup, it’s Insurance
Commish Steve Poizner who is (you’ve guessed it) a Republican.
So why is straight talking maverick John McCain (who believes in
communist conspiracies like global warming and re-importing drugs)
spouting the NFIB/Cato line on health care reform? After all, isn’t
this a great area to be a maverick and deviate from the Bush line?
I assume that the answer is McCain feels health care is important
enough that he has to say something, but he’s more concerned about not
upsetting the health care industry. After all, even if he does (by some
miracle/Democratic ineptitude) win the election, he’s not actually
going to do anything about health reform. But then again, my guess is
neither are the Democrats.
Categories: Uncategorized
Who’s going to PAY for it? And why should I?
Then, who’s going to PAY for mine? And why should you?
What would be wrong with an internet based insurance group that worked much like a Job Union in seccuring good afordable healthcare for people without employer paid healthcare. You see, it would be so easy for something like this to drive the costs of heathcare back down to where it should be for the American people.
How about a web of internet sites unionizing to get the drug and other companies wishing to slatter their adds all over the internet in the pocket for a change. I think once the drug companies and other health product based companies find the “Insurance Web” the place to do their addvertising, revenue can be made to drive the cost of healthcare down by giving a better break to each group members.
This could be something that could all together replace employer group coverage. I know that something needs to be done quickly, and I can’t think of a better place to recieve the power that it would take to turn this thing around, other than the internet.
I respect McCain for his integrity and passionate focus on the policy of issues in which he truly believes (national security, immigration). I, however, am completely suprised that he would endorse a healthcare proposal that would ultimately worsen our healthcare infrastructure (which is saying quite a bit given its current status) as well as put many good Americans who are afflicted with some type of chronic condition in financial peril.
It is one thing to endorse the value of market dynamics for improving quality while lower costs for consumers. I am a proponent of universal coverage, I can not deny the powerful mechanisms which a functional market can employ on services and those who provide to a consumer group. Unfortunately, the details of McCains healthcare plan (at least the ones he has made available) does not truly enable a transparent healthcare marketplace. Instead it further increases the profits of the current insurance companies by having the Federal government rubber stamp their desire to cherry pick only the most healthy of patients.
McCain would create a “high-risk” pool state-by-state that is funded by federal and state funds. Can anyone say Medicaid part B. The problem is that as soon as states run budget deficits the dollars funding this group will be cut and the sickest of the sick will be forced to go with out regular treatment unless they wish to pay exorbant list prices for healthcare services.
There are elements of McCain’s plans that have merit and I agree with Matt’s comments that McCain could easily build a foundation that could lead to true, valuable healthcare reform. I would like to see McCain truly dedicate a healthcare proposal to market reforms that enables transparency of prices/reimbursement, universal access (whether mandated or accomplished through market driven lower costs), improved quality of care.
These are the fundemental tenants that we should be shaping our healthcare infrastructure around and not enabling for-profit insurance companies to only target healthy, highly profitable individuals and leaving the rest of us to the states and federal government.
The individual health policy market approach could work but there have some important caveats that have be worked out (e.g., denial of prior conditions). In fact, the GAO just released a study today that looks pretty positive on Wyden’s bill. Have to read through and take a look.
One issue though is that any honest person would admit that the cost and quality information that is needed by consumers in an individual market is no where near a reality and isn’t going to be for quite some time.