McCain's Health Care Plan: Making Consumers Suffer More

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"

Baltimore Sun, "Obama, critical of McCain's health care plan, says he would cancel tax cuts," 

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)
 

Comments

[Annie]

This scares the crap out of me! We too have a HSA and a high deductible plan - and my husband has a pre-existing condition - if McCain wins and implements this - we are screwed.

It's just more proof to me that McCain simply could care - not only does this do nothing to help 47 million people currently uninsured - it'll send a whole bunch of us to join them!

[Sharon]

I have seen health insurance lobbyists at work - they are savvy and well paid to protect the ever-increasing profits of health insurance companies. Costs must be reined in. If insurance companies have not worked to contain costs in the last two decades, why would they start now? Deregulation is not the answer. The health care system in this country cannot be fixed by following free market strategies, and we know this because health care costs are out of control and show no signs of slowing their growth. People need to be able to afford coverage and doctors need to be paid for their services. Affordable health care would make American businesses more competitive in the world market, just one more of the many reasons this is a critical issue in this election.

[hibikir]

I can't say I like Obama's plan: While it does help those that are not or can not be in a group plan, it does squat for those of us stuck with terrible group plan options. Insurance costs have skyrocketed, and there's nothing in the plan to ease the pain.

Still, no matter how lackluster Obama's plan is, McCain's is just a disaster for everyone but the insurance companies. Individual health insurance, unlike car insurance, is designed in such a way that people can be left to die in the ditch due to no fault of their own. Family full of heart conditions? Sorry, you must have picked better parents. Your area's pollution leads to lung problems? You should have moved.

Europe has it right: Provide good coverage to everyone, and if people want extras, let them buy supplemental insurance. Drugs are cheaper because the state negotiates huge group discounts with the pharmas. The end result is much cheaper care that is just as good if not better for most illnesses.

[Wendy]

This discussion is starting to get confusing. My understanding now is that employers will not pay more tax on health care benefits, but employees will, and the credit goes directly to the insurance company. So in a sense the employer pays a bit less but the employee--my family--is being taxed on a higher amount (the value of salary+benefits). Right? I don't see how that's not a tax increase on me! And it seems like a disincentive for the employer to provide better coverage. And since my husband has a preexisting condition, we're stuck with the scary prospect of not being able to buy insurance if we lose group coverage.

Yes, I'm very alarmed by McCain's plan. Please keep the health care issue posts coming so we can all understand this and spread the word.

[Julie Pippert]

Wendy, employers do not currently pay tax on employee health benefits; in fact, they currently get a tax credit. Under McCain's plan, that credit will be removed from employers and given to the insurance company. Employers will be taxed, and yes, that will come through to you. it sounds like it will be considered as income. So yes, confusing but yes, I think you get it based on my understanding.

And yes, you definitely have it right when you get that it SUCKS FOR THE PEOPLE.

Most of us have a previous health condition, at least most of us over 30 and those of us more in 40s.

With the deregulation, that pre-existing condition doesn't have to even be something serious. I know people are out there thinking "oh cancer, heart disease, serious."

No.

ALREADY it can be menstrual cramps! Women have been dropped from group plans because of endometriosis!

Just imagine...you had chicken pox? No insurance because you're at risk for shingles!

Deregulation of insurance will bring no good to consumers.

Hibikir, ITA that McCain's plan is a disaster waiting to happen.

Sharon, well-said!!!

Annie, absolutely.

[Peter]

why not socialized medicine?.
I live in Ontario Canada and am Currently out of work with a broken hand. Ive gone through surgery pins and bolts and cant work now. Ive had outstanding medical attention, I've even had a nurse come to my house. Seen a doctor numerous times, had a top if not the top orthopedic surgeon operate on me. The medication for pain that I'm taking (numerous prescriptions) cost me $8.73, in a US discount drug mart, the same bottle is $199.98.
The reason all of the Canadian politicians support socialized medicine, is because they want to get elected, it would be political suicide to go against it.
The vast majority of Canadians want socialized medicine, poll after poll is in the 90 plus support range.
90 plus percent of the Canadian population cant be wrong.
The truth is nothing is perfect and should be improved on as every one here will tell you, but focusing on the negative and telling people that's what it is, is simply a lie and I hope your smarter.
Peter

[Lacie]

So it seems John McCain is now either a whore for the insurance industry or an emptier suit than GWB ever was. If he understands what he is doing with his health care proposal then I no longer honor his service to this country. His bad intentions cast a dark cloud over his former acts of courage.

[Jamie]

I also live in a country with socialized medecine. I have been married to a Frenchman for 21 years and have spent that time living in France and Italy. Between the state funded healthcare and the obligatory employer health complement, everything is covered, pre-conditions or not, from the basic healthcare to emergencies and long-term care. This covers medecines, visits, eyeglasses, hospital stays, ambulances, etc. Because the state pays for almost everything and they know that it is cheaper to pay for prevention than illnesses, it has become a preventive medecine system, for example: it covers yearly pap smears and mammograms for all women as well as amniocentesis for all pregnant over-40s; my sons each receive a paper once a year for a free dental check-up; women, as soon as their doctor declares their pregnancy, receive a booklet of coupons to be used for dated, regular visits, blood tests, sonograms as well as a physical for the father-to-be. We never have to worry about anything.
Granted, under a system such as this, there is room for abuse, but the government comes in behind and tries to put in place measures to prevent that - and in my opinion a lot of abuse is due more to the over-protection of employees here in France.
When I was just out of college and living in New York and living hand to mouth, I couldn't afford healthcare. I discovered a lump in my breast that had to come out, and ended up paying more than half a month's salary out of pocket for the surgery (didn't eat very much that month)- in fact the doctor offered to do it as outpatient surgery in his office because I couldn't afford the hospital stay. After my initial visit with him, I was waiting for the elevator and came across a woman crying hysterically - she had the same condition I had, but more advanced and the doctor had told her that it would be a death sentence if she didn't have surgery, but she had neither insurance nor the money, as I did at least, for the operation and didn't know what to do. I think of this poor woman every time I pick up medecine at the pharmacy without having advanced a penny, or each time I see a reimbursement show up on my bank statement. If any European country (and Canada where we had a very good experience with their system when my son, while on a visit, had a medical emergency) can achieve this and offer this level of security to their citizens, than it can and should be done in the states.

[Amie Newman]

Thanks for such an excellent run-down on the real "choice" McCain offers on health care reform.

Thought folks might also be interested in Governor Palin's record on ensuring access to health care for children...so much for prioritizing them!

Palin, The Protector of Children vs. Her Record
http://www.rhrealitycheck.org/blog/2008/10/03/palin-protector-children-vs-her-record