Senator John McCain's health care plan ties the hands of state insurance regulators and puts consumers at risk, according to Kansas Governor Kathleen Sebelius.
In a conference call this morning with Pennsylvania Insurance Commissioner Joel Ario and Ohio Insurance Commissioner Mary Jo Hudson, Sebelius discussed the effect John McCain's health care plan has on state protections for consumers.
Sebelius, who prior to being elected governor served as the Insurance Commissioner for Kansas for eight years, warned that McCain's plan puts people at risk. She explained that the McCain plan proposes dismantling current protections. "In an article that he wrote, McCain outlined deregulating the health care industry the same way the banking industry has been deregulated," Sebelius said, referring to the current economic crisis, which many blame on banking deregulation.
The Obama-Biden campaign agrees, and in a press release wrote, "In keeping with his commitment to do "to the insurance industry" what he's done to the banking industry, John McCain's plan would deregulate insurance and put the interests of insurance companies ahead of American families by eliminating independent reviews of coverage denials and undermining key state protections, such as breast cancer screenings and mandatory vaccinations."
Ario, Sebelius, and Hudson all explained that state regulators, who are overseen by the Commissioner's office, ensure that consumers get the health care promised to them within the insurance plan they bought. Sebelius described situations in which her office protected people who were denied chemotherapy, covered medications, and even the full length of covered hospital stay for mothers and newborns.
Ario said that the McCain plan destroys the group market, which is currently the market that is working. He said that the group market spread health care across a group pool, which keeps rates stable and affordable. "McCain's plan steers us towards the individual market, which is broken, when what we need to do is steer the individual market towards the group market," he said.
Consumer protection varies among states, Ario said, and so some states would have better protections that others, but all would carry risk for the consumer. 33 states have high risk pools, but those only cover approximately 300,000 out of approximately 70 million. "Once you segregate the sick,"Ario said, "It becomes too expensive to cover, so the rates get too high and they set caps on the care."
Hudson said that the most troubling aspect to her was that the McCain plan starts by taxing the employer for benefits offered to employees.
She said that in Ohio, "920,00 would lose their insurance under McCain's plan, especially in this fragile market." That would nearly double the number of uninsured in Ohio.
Hudson also said she agreed with Ario and Sebelius and echoed her concern about state regulator's hands becoming tied by deregulation under McCain's plan. "Consumers rely on regulators to ensure that their plans have outside review, that insurance companies aren't dictating medical decisions, and that they include necessary care," she said.
Under McCain's plan, these things would be at the mercy of the insurers, according to Hudson. She explained that McCain's plan is comparable to Medicare, where states have no jurisdiction to protect consumers, and as a result, there are two major negative outcomes: (1) predatory sales practices perpetrated on senior citizens and (2) many seniors don't know what coverage they'll have year to year.
Sebelius said that Senator Barack Obama's plan retains current protections, whereas McCain's plan puts medical decisions into the hands of the insurance company rather than medical practitioners.
Sebelius said that McCain's plan, which taxes employer benefits, provides disincentives to employers to provide health care plans for employees and also that the credit it provides does not cover the increase in health insurance costs since George W. Bush took office. She added that this included both individual and family plans.
Since President Bush took office, health care costs have risen 3.7 times faster than the average wage. Currently 45 million American are uninsured.
Employers have never before been taxed for providing benefits to employees. McCain's plan would move the health care tax credit to health insurance companies. Insurance companies would also be allowed to sell insurance across state lines.
Although some individuals, primarily the young and healthy, might benefit under McCain's plan, others would be at risk, said Ario and Sebelius. Sebelius warned that breast cancer and cervical cancer screenings among other women's health care would be at risk of not being covered. Ario warned that employers who still endeavored to provide health care insurance despite the tax would end up with a smalled, less healthy pool, thus would have higher costs. The young and health are more likely to search for an individual plan, he said.
"Under McCain's plan, the young and healthy will be okay, until they get sick," Sebelius said. She also said that to keep the story straight, people should understand that Obama has never proposed that everyone should be covered under a government plan, "Senator Obama says that if you have health insurance and are happy with it, stick with it."
My take: The Obama-Biden campaign has a valid point. I am most concerned about the deregulation undermining or eliminating oversight and consumer protection. I understand the argument is that increased competition provides better and cheaper service, but this is not my experience, and not what I see across the board in many business areas, such as phone, cable, and most notably, banking. I seriously doubt it would apply to health care, which already has, under Bush and his company friendly cabinet, increased greatly in cost and decreased in service and coverage. My family has had to augment out health care with a health savings account, and health care now consumes a large part of our budget, requiring that we cut in other areas. I'm also extremely opposed to taxing employers for health care benefits.
What do you think?
Additional Suggested Reading:
San Francisco Chronicle, "Obama assails McCain's health care plan"
The Associated Press, "Obama: McCain health care plan a bait-and-switch"
Obame-Biden critical analysis of McCain health care plan (Click here for the PDF)
Five Pitfalls of the McCain Health Care Plan (Click here for the PDF)