Wednesday, October 15, 2008

The Candidates on Disability - Part V: McCain and Healthcare

And to think that I thought I was done with this series!

OK, here's the deal on regulation/deregulation. Some states regulate health insurance more heavily than do other states. For example, my state might require medical insurance providers to cover prescription drugs while your state does not.

John McCain supports "deregulation." He would like people to be able to buy insurance across state lines. That sounds harmless, right? Maybe even a good idea? But what if you live in a state that requires medical insurance companies to cover things like pre-existing conditions, maternity care, expensive treatments for cancer, or prescription drugs? Your insurance policies are going to be more expensive than a plan that doesn't cover those big ticket items.

If you deregulate and allow people to shop across state lines, young, healthy folk are likely to buy cheaper plans to save money. That just makes good sense. (It's a gamble, of course. If you ride in a vehicle, breathe, or just tend to age chronologically, chances are you will need your medical insurance at some point. Perhaps for something that's not covered.)

But if the healthy people are getting their health insurance elsewhere, then all that are left in the truly comprehensive plans are . . . the elderly and the sick. And those plans are going to get a lot more expensive.

The only way for a medical insurance company to stay in business will be to move to a state with less regulation and not offer those treatments that aren't cost-effective.

This is very bad for people with pre-existing conditions and disabilities.

But wait, there's more.

While still having the option of employer-based coverage, every family will receive a direct refundable tax credit - effectively cash - of $2,500 for individuals and $5,000 for families to offset the cost of insurance. Families will be able to choose the insurance provider that suits them best and the money would be sent directly to the insurance provider.

Sounds good, right? Two big problems. First, if you choose to participate in your employer-based program, you'll be taxed on that benefit as if it were part of your income! (This will drive people out of employer-based plans and to private plans, see above.)

Second, you have to be able to pay for your plan up front, with the government "refundable tax credit" coming later. Say you don't have a few thousand dollars (or more, if you're older, female, or otherwise harder to insure) lying around in your checking account. What do you do?

BusinessWeek reports:
The Commonwealth Fund, a nonprofit that studies health-care issues, estimates that McCain's plan would reduce the number of uninsured Americans by 1.3 million over the next decade, at a cost of $1.3 billion, while Obama's plan would reduce the uninsured by 34 million and cost $1.63 billion. The Lewin Group, a health-care market researcher, figures that McCain's proposal would cost $2.05 trillion over 10 years, and Obama's would cost $1.17 trillion. Both campaigns dispute all these estimates, saying costs would be lower and coverage higher.

If you have a disability or you love someone who does, and you want to make sure that your family is insured, and that your insurance pays for the treatments you need, then McCain's plan is scary for you. According to a report from the nonpartisan Commonwealth Foundation in MedScape Medical News, "The McCain plan encourages people to move into the free market, which may benefit some. But there are a whole variety of structures in the McCain plan that are ill suited for people with chronic needs, such as cancer patients. It would allow or even encourage the loosening of state regulations that currently protect people with chronic illnesses."

The links above, to McCain's campaign website, the BusinessWeek report, and the Medscape report are very interesting. Also very informative is the October 7th Diane Rehm Show. And I highly, highly recommend Jane Bryant Quinn's Vetting McCain's Health Plan in the October 13th edition of Newsweek. It's a quick and easy read. Please check it out!


Lynnie said...

Health care is a top issue for me, as I have a pre-existing heart condition. We could get my two daughters tested today and find out if they will ever develop it, but I am afraid of doing so for fear of having them labeled with a pre-existing condition as well. Isn't that ridiculous? Getting them tested could mean getting better care for them earlier to offset any major problems, but it could also mean causing them to have a LOT of trouble getting affordable health care for the rest of their lives. It is a tough issue. I would have no trouble whatsoever paying higher taxes to make certain that everyone without question has health care.

Stuck in my head said...

Excellent post and thanks for the links.

@lynnie -- "I would have no trouble whatsoever paying higher taxes to make certain that everyone without question has health care." So wonderful of you. Unfortunately most people don't think of others and would rather pay less taxes which impacts other people's health care, education, living areas, etc to a lot of people's detriment.

RobMonroe said...

Lynnie - that's upsetting on so many levels. I wish our system would work better for your situation.

As a Chronic Kidney Disease patient I have to admit (daily) that I'm sick. If I didn't have health insurance my meds would cost almost $5,000 a year, and that's just the kidney related ones. Add into that Anny's meds and Abby's meds, we would be broke. We are already making choices with our money, I would hate to think that I would have to choose which medicines to take.

Kristi said...

Sarahlynn-- I think your prediction about young/healthy people crossing state lines to buy cheaper health insurance is only one side of the coin. At least initially, before premiums adjust for all the plan-hopping, sick people, elderly, and those "high-risk" folks like women who want to have a baby will also be shopping across state lines for coverage that they can actually use. The only way the deregulation thing could work is for all plans to be regulated by a common, national, set of guidelines. That's the only thing that would wipe out the state regulation variable in the system.

As for the tax credit vs taxed healthcare benefits, I don't like that plan at all. Completely selfish of me, of course. But I happen to know that my employer-provided insurance plan (which so far is spectacular...for a nearly $1million set of bills for Trystan's gestation and first year, we paid a total of a couple hundred $ in copays--mostly $10 at a time). That plan costs my employer around $12-15000 a year to cover me and my family. $5000 for a family? And you're going to tax me on the rest (or maybe all of it)? No thanks.

I don't have a fix for the uninsured problem. Telling everyone to find a good job with good health insurance, like I've been lucky to do, is like telling them to eat cake. But breaking the parts of the system that work sounds like an even worse idea.

stljoie said...

My insurance costs $1300.00 a month. My husbands is $1100.00 a month. His employer pays 80%. Our taxable income would increase over 20,000 dollars! McCains offer would not buy anyone insurance. Further, I am in the process of medical tests and facing a major operation. So I get notices from said insurance saying a charge for the test was $3,102.03 and that they paid the "allowable amournt" of $424.00 That the 'Providers responsiblilty' is $2678.03 and that they 'saved' me that amount. First of all I ask....Isn't the insurance company pocketing $2678.03? Second I ask, Is the $424,00 the actual cost of the test if the provider agreed to that amount? What I know.. is that if I didn't have insurance I would be required to pay $3102.03 Do you follow me? Most of the cost of medical care goes to insurance companies. I don't think we can afford their real estate, dividends or nice salaries. I think a national non profit solution is the only answer that makes any sense at all. And technology negates a huge bureaucracy being neccesary to run it.

Lady Liberal said...

Hey Sarahlynn!
Don't know how to email you, but I wondered if you saw this?
18-year-old hs senior in TX with Down's was voted homecoming queen! Watch the video- the expression on her face when they announced the winner is the most beautiful thing I've seen in some time. :)

OneTiredEma said...

I have a friend who works for the Commonwealth Fund. The Fund itself is non-partisan but she said the whole office is supporting Obama at the polls (based on health care issues alone).

Sarahlynn said...

Lynnie, it's awful that you have to be concerned about your daughters' future insurability. And I'm with you on the taxes.

Thanks, Stuck in My Head. : )

Rob, yeah, that's just an unacceptable choice. Unacceptable. I was talking to a woman with cancer this weekend who *is* having to make those choices, right now. She and her doctor are actually having conversations about balancing her risk of recurrence with the amount she's paying for the drugs that are keeping her healthy. Cost should not be a decision-making factor in situations like this.

StLJoie, well said, and thank you for the specifics. I'll add: watchdog groups to keep an eye on all that big government are a necessity, too, as are independent audits.

Lady Liberal, thank you for the link; I'll have to take a look at that later! (There's an email address linked in my profile, I believe, though I don't check it often. Comments are a good way to reach me.)

OneTiredMama, your friend and her coworkers are not alone. And it doesn't mean that the group is partisan, just that Obama's plan is significantly preferred by many in the healthcare community, especially those in independent watchdog groups and those who look out for the un/underinsured.

Kristi, the thing is that without government led "incentives" to do so (read: regulation) insurance companies simply will not offer coverage that's not cost-effective, in any state. And as for this part, "The only way the deregulation thing could work is for all plans to be regulated by a common, national, set of guidelines. That's the only thing that would wipe out the state regulation variable in the system."

Sure, I agree. But that's not what McCain is proposing.

I'm not sure what you mean by breaking the parts of the system that work. Do you mean McCain's healthcare plan encouraging people to leave their employer-sponsored plans? If so, I completely agree.

Kay Olson said...

Currently, there are severely disabled people (many quite young) forced to live in nursing homes hundreds of miles from their families and loved ones -- not to mention unable to go to work or school because they're institutionalized -- because of the differences in state health coverage and the lack of funding in many states for in-home care.

Unable to get funding assistance in their own states (like Georgia, for example) they are shipped to nursing homes as far away as Ohio because of the deregulations in their own states. Yay for deregulation.

The Community Choice Act is a congressional bill that seeks break the nursing home industry's lock on Medicare funding so that people are not forced to go to institutions because the money is funneled only there. It would allow people exactly like me in every state to live in their home, as I do, instead of a nursing home. John McCain has stated he is absolutely opposed to the Community Choice Act.

He would prefer, for example, that an elderly woman who breaks her hip, be categorically institutionalized in a nursing home instead of having the option of receiving assistance and rehab in her own home, when that is workable.

People need to understand what deregulation is really about. It's about starving the public programs enough to break them altogether, in the belief that the free market will be a better solution. Those unable to participate in the free market system are S.O.L.

Great post, Sarahlynn. I'm glad you've covered this election and the candidates so well on disability.

Laurie said...

Love this post! I'm going to link to it as well. I knew I didn't like McCain's plan, but I didn't realize the $5000 was for a family. That is terrible. Also you make a good point about having the cash up front, I don't think I'd be able to afford that.

Sarahlynn said...

Kay, excellent point, and very well stated. Thank you!!!

Laurie, thanks! The cash up front thing hit home for me, too. We recently bought a used car and we don't have a warranty on it. We wanted one, but our "new" car is a hybrid Honda that we bought from a Dodge dealership. Dodge doesn't service hybrids so wouldn't sell us a service package. They talked with a local Honda dealer who offered us a good deal on a service package . . . but we didn't buy it because we would have had to pay up front rather than rolling the cost of the service package into the price of the car and adding a few dollars to our monthly payments.

I'm sure we'll regret this down the line, but what else could we do?

Sarahlynn said...

Also, I apologize for misspelling your name, OneTiredEma.

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