"And Now For Something COMPLETELY Different": John McCain Unveils His Plan for Healthcare

Q: What is John McCain doing on the MOMocrats?

A: Senator McCain gave a major speech on health care this week; a subject high on the MOMocrats' list of issues we are most concerned about - especially during Uninsured Children's Week.

The fact that the GOP now acknowledges that we HAVE a health care problem is significant, and when the McCain campaign graciously invited the MOMocrats to take part in a conference call discussing the candidate's proposals, we jumped on it.

The current system is broken, and we want to hear creative solutions -- no matter where they come from. Great ideas often come from brainstorming from all directions. So how would a President McCain fix the system?

At First Glance

I had heard that John McCain's take on our health care situation was to let everyone choose to buy his or her own health insurance, and to my ears, that did not sound like much of a solution. ("Hey - You're on your own. Good luck if you are old or have a pre-existing condition.") But it was nice to hear he was pro-choice about something.

However, I'd not heard the part about a $5,000 tax credit to help families fund it. That got my attention. At first glance, that sounded pretty good.

But what about folks who have been shut out of the system because of pre-existing conditions? Or those who cannot afford to shell out the premiums for health insurance?

McCain promises to "work tirelessly to address the problem"  by establishing a "Guranteed Access Plan" (GAP) that would be modeled after the most successful state programs serving the underinsured population. But he vows that  he "won’t create another entitlement program that Washington will let get out of control." 

During the conference call, McCain policy advisor Doug Holtz-Eakin said the candidate has a vision for transitioning our health care system to one that "would be more responsive to American families at a lower cost" and "tailored to the circumstances of your life."

That sounds really good. But what does it really mean? Let's ignore the argument about "entitlement programs" and "mandates" for the time being and focus on the practical: How would it work?

With 47 million Americans currently without coverage ("nearly a quarter of them children," as the Senator pointed out in his speech), I'm thinking a McCain administration may have a tough time finding those solutions on the state level. I'm glad he plans to "work tirelessly," but those 47 million people need results. How long is it going to take?

McCain says, "federal assistance could be provided to a nonprofit GAP that operated under the direction of a board that included all stakeholders groups – legislators, insurers, business and medical community representatives, and, most importantly, patients.  The board would contract with insurers to cover patients who have been denied insurance and could join with other state plans to enlarge pools and lower overhead costs.   There would be reasonable limits on premiums, and assistance would be available for Americans below a certain income level."

This sounds complicated and less assured than the solution proposed by both Obama and Clinton: Just require the companies to insure EVERYONE, regardless of pre-existing conditions. Sorry if that sounds like a mandate -- but how else can you be certain that no child - or adult - will slip through the cracks?

Former Hewlett-Packard chair Carly Fiorino (who was also on the call) added the thought that the $5,000 tax credit would put patients in control of their own health care (instead of doctors, hospitals and federal government). She asserted that this would give everyone affordable, portable health insurance, because we would be able to choose and purchase coverage from a national market (anywhere in the country, as opposed to just within our states). Affordability would come through competition and choice, which she opined, would drive down costs. And since coverage should be available to everyone, incentives would be given to the insurers and the states so that costs are reduced.

Another feature of the plan is a focus on transparency, with doctor's fees and patient ratings readily available for anyone to find on the Internet and a focus on covering treatment instead of simply tests & procedures.

Fiorino said the McCain plan's emphasis on prevention and healthy living would save costs by preventing treatable conditions like obesity (which can add to your chances of developing diabetes or heart disease). She said that incenting people to exercise would be part of the plan.

I find this aspect of McCain's proposal the most interesting, coming from a conservative Republican who believes that government has no business getting involved in the lives of the citizenry. (Unless the citizen is pregnant... or if this plan is implemented, overweight.)

I also have the vague recollection of hearing some of this before... when Hillary Clinton and Barack Obama made these part of their health care proposals.

The high cost of prescription medicine is addressed in the McCain plan by allowing the re-importation of generic drugs from places like Canada. (Can someone please tell me why we need to re-import drugs from Canada - which has low prices because of regulation - but won't purchase in bulk through MediCare or impose price controls of our own? Please?)

The final piece of the McCain health care puzzle is tort reform, so that the price of malpractice insurance isn’t adding to the cost of patient care.

So What's Wrong with It?

Let's begin with that $5,000 tax credit. Assuming that a family had the money to purchase the insurance in the first place, that's a nice chunk of change to get back. But how much coverage would $5,000 buy?

I logged on to a website that promised to give me comparative quotes for health insurance. I input the birthdates of the three members of our little family and our zip code, and the site returned 107 different health insurance options; an alphabet soup of offerings (from many of the same companies), with different deductibles and coverages. Some were HMO's, some were PPO's, and some included prescription drugs.

Over 100 to choose from, and I couldn't be certain that this site included EVERYTHING available. If I were to really try shopping for new health insurance, how easy would it be to analyze all this information? Who could I find to advise me? Who could I trust?

And then, what if Fiorino is right that eliminating state regulations would open the market to more health plans? Would that give us thousands to choose from instead of just 100?

This reminds me of the horror stories I heard from seniors when the Medicare prescription benefits were introduced. There were so many plans, so many rules and a deadline, and many seniors discovered - too late - that the plan they were in did not cover the medications they needed.

And how competitive would these companies be in my state - expensive California? How could we expect the companies to stay in business here? What assurances would we have that once we obtain a health insurance policy that fits our needs that the company will stick around for us?

I can't help but think of our experience with home insurers following the Northridge earthquake, when many companies decided they simply didn't want to do business here any more because the risk was too great. Today, no insurer offers earthquake coverage -- the state had to step in and create its own pool (kind of what McCain feels will be necessary to do for people with low incomes and pre-existing conditions).

I am already overloaded with information and paperwork and record keeping. I don't want to have to take the time to analyze 107 different insurance plans. So I decided to take a peek at the five of the site's 12 "Best Sellers," from the standpoint of yearly premiums and deductibles:

Plan	Deductible	Yearly Cost	(Cost + Deductible) - Tax Credit
Kaiser - HMO	$1,500	8124	$4,624
Aetna - HMO	5000	5556	$5,556
Blue Shield - PPO	1000	4164	$ 164
Pacificare - PPO	3000	7092	$5,092
Kaiser - $25 copayment	0	11676	$6,676

As you can see, comparing the plans this way doesn't work. I wonder how the Kaiser HMO plan with a $4600 annual cost compares with Blue Shield's PPO for $164 (after tax credit has been taken).

Also, these quotes are for a family of THREE. I'm afraid that $5,000 tax credit won't go far at all in reducing costs for a family of four (or five, or more).

If McCain is elected and points us on this track, I shoudn't have to worry about this, as we already have coverage through my husband's employer, and no one under this plan would HAVE to purchase insurance. They would just have the tax credit to rely upon should they choose to.

But maybe I SHOULD worry.

Due to spiraling health care costs, my husband's employer has switched carriers five times in the last decade. The most recent one left me with a nasty discovery: none of our current doctors are a part of the new carrier's network and I am now trying to find new ones we may feel comfortable with.

That's why I laughed to myself when McCain's people were asked about the inevitability of employers dropping the health care benefit altogether.

Fiorino was adamant. "I don’t understand why this misconception exists," she said. "Employers will not stop offering insurance."

Maybe. But maybe not. If their tax break doesn't cover all their costs and they can deliver more profits to their shareholders by cutting out that cost, I guarantee you that lots of companies -- especially the smaller ones -- will drop insurance coverage. After all, isn't that the way the free market works?

McCain's people were asked if they were afraid that creating a $5,000 tax benefit would force companies to set that as a minimum amount and go up from there?

"Your question shows the importance of coupling the tax benefit with competition," Fiorino answere. "Your question is will the health insurer gouge the customer? With competition, they won’t have that."

Ah, yes. To my Republican friends, the answer to any thorny social or economic problem is to unleash the forces of competition.

I won't argue with them the consumer benefits when companies compete. When the nation's airlines were first deregulated in 1978, the competition it unleashed resulted in lower airfares for all. It turned us into a nation of flyers. Demand increased, new low-cost carriers sprouted up and business was booming...

...until the first economic downturn. Then you had airlines that went out of business, consolidation, and fares started hiking back up. We are undergoing a similar period now, thanks to harsh security measures implemented after 9/11 and the high cost of fuel. The market is forcing airlines to squeeze as much as they can out of their operations.  The result is higher fares, packed planes, no-frills service, cancelled flights and stranded passengers.

I'm not really trying to compare the inconvenience of a ruined vacation or business trip with the tragedy of a family dealing with a medical emergency and having no way to pay for treatment. Air travel is an optional activity. Medical care is essential and ought to be an inalienable right. Yes, I think in a nation that purportedly has the best medical care in the world, our people should be ENTITLED to having access to it, without having to worry about how to pay for it. This is not something that should be left to the vagaries and chaos of an unfettered free market.

The Democratic candidates, by the way, also tout competition as a means of keeping costs down. But they want to impose some rules on the market to ensure that no one is left without coverage.

I would like to learn more about some of the points Senator McCain made in his healthcare speech - especially as to how they differ from the plans of Barack Obama and Hillary Clinton.

And the truth is, I agree with John McCain that it would be nice to have a choice, because if I had my druthers, I would get rid of our family's current crappy insurance plan and opt in to the one that covers employees of the Federal government; the same one that Senator McCain has...

...just as Hillary Clinton has proposed.

John McCain's campaign ad on healthcare may be viewed here.

Donna Schwartz Mills also writes at her personal blog, SoCal Mom.

Comments

[PunditMom]

I give McCain's people credit for inviting us to be on the call -- no one from the Obama or Clinton campaigns have done that yet. But how about this angle to McCain's "health care" plan -- Mr. PunditMom heard McCain say that one of the key aspects to his plan is that if people exercise more, they won't get as sick.

And I could become the Queen of Sheba.

Donna, thanks for this great recap of the phone call!

[cynematic]

OUTSTANDING, Donna. Thank you for laying out the issues so clearly.

[Izzy]

Until recently, I felt very secure with my husband's insurance plan through his employer. Until the insurer raised premiums 55%. FIFTY. FIVE. PERCENT. That means it was going to cost an extra $500 or so a month on top of the eight hundred we were already paying.

That's thirteen hundred dollars a month under a group plan for so-so health coverage instead of, you know, food, a roof over our heads etc. Of course, his employer said forget it and went looking elsewhere.

Now we have a Health Savings Account through United (still 800+ a month) and it's no wonder Bush Inc. was pushing these things so heavily — they're the biggest scam ever invented.

I would welcome any candidate's plan that actually provides some healthcare and if it's one that doesn't make me feel like the biggest sucker ever born, well that would be the icing on the cake.

In any case, I would never, ever trust McCain to follow through on these big ideas of his (or rather...his consultants.) He's a Republican. 'nuff said.

[debbie]

Donna, you deserve some kind of award just for slogging through that call. But this piece? Is brill. Tiara for you.

[Julie Pippert]

Fabulous article!

I am surprised Fiorino supports ladling the cost burden of health insurance to private companies.

The Republican stance on this issue seems a bit divided, to say the least. On the one hand, they talk about not burdening private enterprise with societal support beyond employment (such as unfair tax burdens) and then on the other hand, they trot out a fairly traditional model of co-dependence on business to provide people with health insurance.

What that doesn't cover is: part-timers, work at homers, contractors, entrepreneurs, and so forth.

Additionally, Fiorino's (and Republican) assertion that market forces and competition will correct and create affordability is absurd.

How's that working for: current food prices, gas prices, cellular service prices, cable prices, and oh yeah health insurance costs?

Our health insurance costs and co-pays skyrocketed and coverage went DOWN this past year. My husband's company predictably in a tight economy is looking for ways to save. So we assume more cost and get less service. We've started an HSA to try to cover ourselves better.

I agree with you: one downturn is all it will take for cost-cutting measures, such as eliminating or cutting back health insurance plans.

It's an elitist and naive assumption that we all have equal access.

Additionally, I'd like to quote something from the CDF here:

"9.4 million children in America, almost 90 percent living in working households and a majority in two-parent families, are still uninsured. Millions more are underinsured. Chronic budget shortfalls, often confusing enrollment processes, and dramatic variation in eligibility and coverage from state to state prevent millions of currently eligible children from living healthy and realizing their full potential in school and life."

Medicare, medicaid, CHIP, etc. all have the same simple accessibility issue.

I'm also inviting everyone to Moms Speak Up tomorrow for Cover the Uninsured Day. We'll have fresh blog posts on this topic and an interview with Laura Guerra-Cardus of the Children's Defense Fund.

Site at: http://momsspeakup.com/

[Donna]

It probably won't surprise you that during the course of the conference call, Carly Fiorino disclosed that she is now on the board of Revolution Health.

[Kyla]

They just don't get it. The system is broken. A $5000 band aid isn't going to fix it. Not for my family. Not for my children.