By JOHN GOODMAN
The Republicans have no plan to insure the uninsured.
How do I know that? A New York Times editorial told me. So did Ezra Klein, writing in The Washington Post. Matt Miller, also writing in the Post, went further. “I’m willing to repeal ObamaCare,” he wrote, provided the Republicans can “cover the same number of uninsured” and “do it at a lower cost.”
So why don’t the Republicans have a plan? That’s easy. “They’re against reform because it would cover the uninsured — and that’s something they just don’t want to do,” wrote Paul Krugman in The New York Times. The Times’ own editorial said the same thing.
All this has caused me to suffer a bout of severe depression. But, wait a minute. Wasn’t health care the biggest issue in the last presidential election? And…how memory fades…didn’t the Obama campaign spend millions of dollars…promoting his own plan?…no, that’s not right…
Ah, now I remember. The Obama campaign spent tens of millions of dollars on TV commercials attacking the John McCain health plan! It spent more money than has ever been spent for or against any policy proposal in the history of American politics.
The McCain plan, for all those suffering from collective amnesia, proposed to replace all existing health care tax and spending subsidies with a universal health grant, structured like a refundable tax credit. The Patients’ Choice Act version of the idea is sponsored by Tom Coburn (R-OK) and Paul Ryan (R-WI). It promises $2,300 (individual) or $5,700 (family) to everyone who isn’t enrolled in a government health plan.
So what was candidate Obama’s problem with that? Did he object that the plan wasn’t generous enough? Too few regulations? No, none of that. The Obama TV ads focused like a laser on raw self-interest. McCain’s health plan, the ads said, will cause your withholding taxes to go up (without mentioning the offsetting credit that would cause them to go down).
Think about that. The Obama campaign spent all that money attacking the most comprehensive and progressive proposal for universal care proposed by any serious presidential candidate in modern times on the grounds that somebody’s tax bill might — just might — go up!
I’ll skip over the question of how you can spend that much money on TV ads and not come to the attention of The New York Times or any of the opinion writers mentioned above, to address a point that can easily get lost with all the demagoguery swirling around. Under the McCain/Coburn/Ryan approach, the first $5,700 a family spends on health insurance is courtesy of Uncle Sam. To have the kind of coverage a typical large corporation has, employees and employers would have to kick in about $6,300 more (with unsubsidized money). Not everyone may choose, or be able, to do that. Some might add $3,300 of their own money and buy a $9,000 plan. Some might settle for whatever catastrophic coverage $5,700 will buy. But everybody — and I mean everybody who doesn’t turn down a free lunch — would have protection against large medical bills.
Let’s contrast that approach with what happens under the new health reform legislation. Recently, Health and Human Services Secretary Kathleen Sebelius gave 30,000 McDonald’s workers a temporary waiver from the new regulations so they can keep their limited-benefit, “mini-med” plans — which would otherwise be wiped out by ObamaCare regulations.
If McDonald’s lowered these employees’ wages by $5,700 and bought them $5,700 worth of health insurance, the only subsidy available today is the one embedded in the tax law — the ability to pay premiums with dollars that escape the payroll tax. (These employees earn too little to pay income taxes.) That’s worth about $872 — less than one-sixth of what the Republicans were offering.
The new health reform law will make things even worse. Because mini-med plans won’t be compliant in 2014 with ObamaCare’s mandated benefit package, McDonald’s will have to pay a $2,000 fine for each employee. In short, to get the kind of plan McCain/Coburn/Ryan would give them for free, McDonald’s workers would have to pay almost all of the cost out of their own pockets (remembering that employer payments are dollar-for-dollar substitutes for wages) and pay a net fine to the government to boot!
To be fully compliant with the new law, McDonald’s and its employees will have to spend an estimated $12,500 on family health insurance in 2014. In this case the federal tax subsidy rises to $1,913. But that implies that $15-an-hour employees will have to give up more than one-third of their take home pay! This is what backers of ObamaCare call “insuring the uninsured.”
Technically, employers and employees have another option. They could drop employer-provided insurance, pay a $2,000 per person fine and let low-income employees join Medicaid or enroll in heavily subsidized plans in newly created health insurance exchanges. But if every employer did this, the cost to the federal government would far exceed the revenues ObamaCare raises. This way of insuring the uninsured is not paid for under the new law.
For all the hoopla, the health reform law enacted last year has no practical way to insure millions of uninsured and underinsured families. By contrast, the Republicans actually had a plan. It’s a better plan than ObamaCare. More universal. More progressive. More rational. And it was funded.
But they would be foolish to trot this plan out again and start talking about it — subjecting themselves to more relentless and dishonest demagoguery — unless the Democrats are willing to renegotiate the entire health reform package.
One party cannot reform major institutions on its own. Not Social Security. Not health care. Not Medicare. Invariably, the party that tries to go it alone loses seats in the next election.
John C. Goodman, PhD, is president and CEO of the National Center for Policy Analysis. He is also the Kellye Wright Fellow in health care. His Health Policy Blog is considered among the top conservative health care blogs where health care problems are discussed by top health policy experts from all sides of the political spectrum.
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Republicans have a plan? Really! The only plans they have is to drive up Premiums and deny services . Lock people out of acess,Make the rates excessive and provide ultra conservative downsized services.
No , their real plan is give business anything they want and screw the middle class to get it. Republicans be damed.
You are so indifferent that you keep taking the bait. And, I don’t post here (or anywhere) calling others “scum” and saying juvie things like “you all suck” from behind an anonymous screen name.
Beyond my snark, my thrust was, if you have any constructive, detailed policy points to make, let’s hear them in lieu of you just lashing out blindly at everyone.
You are a hypocrite, you just have to keep taking your shots.
You have me confused with someone who gives a damn about your opinions!
The least intrusive solution would be national catastrophic insurance, funded by taxes. All claims over $10,000 (or $7,500, or 15% of income,however this worked out) would be covered by Medicare Part A as insurer of last resort.
With this kind of assurance, we would probably have 100 million Americans uninsured. That would mean about 4 million catastrophic claims a year. If Medicare Part A paid $15,000 per claim (after the large deductible) the total federal outlay would be $60 billion. That is about 1% of payroll — far less than what ObamaCare will really cost. Rather than raise taxes on everyone, we should raise the payroll tax on employers who do not offer insurance
Paying for the first $10,000 (or $7,500, etc.) would be a private responsibility. People could buy a minimed policy, have an HSA account, or take their chances. We should have some kind of no-interest federal loan program, so that people could borrow to cover their deductible for emergency surgeries.
There would be no mandates, and no subsidies for insurance companies.
This is a combination of social insurance and free enterprise. Far from a perfect solution, but it would be doable almost overnite.
Although I am a health care leftist, a version of the above program has been proposed by Milton Friedman and Martin Feldstein. I take right answers wherever I can find them.
Bob Hertz
Director, The Health Care Crusade
Corporate profits and professional compensation are not the same. In fact, they are opposites. For accounting purposes compensation is just another expense.
Medical professionals should be compensated at the highest market rate. But the costs of medical care should be treated the same as safe drinking water and fire protection.
“…and watch how fast those premiums drop.”
While preserving provider incomes Dr.?
There’s a point in there somewhere.
take the F-O-R out of profit and watch the scum who are just taking health care for a ride, into the nearest iceberg, off the ship and scurry elsewhere.
Like the AMA and AARP as the latest examples.
Yeah, I know.
I said “properly.”
Uh, last I checked, markets exist to preserve corporate entities. And in today’s disease management industrial complex large non-profits exist to churn more business toward their for-profit colleagues in an incestuous symbiotic relationship.
Humanity is simply part of the inventory.
Humans eventually pass on but the corporations are immortal.
Markets properly exist to serve humanity, not the other way around.
The McCain plan didn’t do anything about those pesky pre-existing conditions. The suggest tax credit/subsidy would by me exactly 1 month of coverage in my state’s high risk pool. When you have access to the FEHP, Medicare, VA and DOD coverage and a wealthy wife you have no concept of how expensive health care is and how difficult it is to obtain adequate coverage when private insurance companies see you as risky.
Market forces won’t work in health care as long as the money and power are in the hands of the providers or the private insurance companies.
None of this health care reform stuff would be needed if we just repealed the insurance industries unfair anti-trust exemption. Let them actually compete against each other and have to deal directly with patients and doctors and watch how fast those premiums drop.
“For all the hoopla, the health reform law enacted last year has no practical way to insure millions of uninsured and underinsured families.”
Not sure then what the subsidies and insurance exchanges in the “Obama” plan are for?
“And it was funded.”
Let’s look at how McCain said it would be funded:
“John McCain would pay for his health plan with major reductions to Medicare and Medicaid, a top aide said, in a move that independent analysts estimate could result in cuts of $1.3 trillion over 10 years to the government programs.”
He didn’t say where the cuts would occur, other than eliminating fraud, which is part of everybody’s holy grail. I wonder how he’d get those Medicare cuts past seniors? Seems I also remember Republicans in the 2010 election scaring seniors about cuts to Medicare with “Obamacare”.
“The Obama TV ads focused like a laser on raw self-interest. McCain’s health plan, the ads said, will cause your withholding taxes to go up…”
We know that Republicans are immune from “raw self-interest”, especially about tax increases and fear mongering.
I won’t defend the “Obama” plan when it comes to actually cutting health costs, but McCain’s “plan” does nothing either about reining in the 6% – 10% yearly increases that are occuring now, it only feeds the beast and leaves all their political contributors happy.
Really, John? And if McCain had won, exactly how fast would he have introduced his plan to get us to universal health insurance? With the same speed that Reagan, Bush I, Bush II introduced theirs, no doubt. Oh and with the same speed that the current Republicans in the House introduced theirs. That is, repeal what the Dems did and replace it with, err…..nothing.
Mistaking a vague plan for actual policy that impacts real people is a bad policy wonk mistake.
John- You appear to be unaware how health care spending actually occurs in this country. $5700 for a family plan does not buy you much where I live. You should also remind us how much your plan will increase each year.
Steve
If voters want to continue to reward pandering and demagoguery with their votes and punish straight talk and tough calls, they’ll get plenty of the former and precious little of the latter.