McCain’s plan to destroy employer-based healthcare

Here’s the latest sign of the Obama campaign’s strategic brilliance. They’ve waited until now, when voters are paying attention, to start attacking McCain’s healthcare plan.

Remember, healthcare was a big topic of discussion during the Democratic primaries. Since then, virtual silence. Bloggers have given two thumbs way down to McCain’s healthcare plan, but Obama has said nothing.

Until the Vice-Presidential debate, when 70 million Americans were watching. Suddenly, Joe Biden launched a devastating broadside at McCain’s healthcare proposal. And then Obama began releasing a series of ads attacking McCain on this point of vulnerability.

There are a number of problems with McCain’s healthcare policy. The above ad attacks one of them:  McCain would allow insurers to provide policies across state lines. As a result, insurers could locate in states where regulations are lax. In other words, McCain’s policy would effectively deregulate the health insurance industry.

McCain’s policy would also effectively destroy employer-based healthcare. Twenty million Americans could lose their coverage — a point that Joe Biden made during the debate. Ezra Klein explains:

Raising taxes by $3.6 trillion on the employer-based health insurance market — which McCain does, and which his campaign has been extremely clear about doing — and then giving an equivalent amount of money in subsidies to the individual health insurance market is not a one-to-one trade. It is not like raising taxes on the rich and cutting them on the poor by equivalent amounts. It’s more like raising taxes on solar energy and then putting the subsidies into oil. He is taxing one thing so people use less of it, and subsidizing another so people use more. The issue at hand is not total revenues but the effect on the market. [emphasis in original] …

Currently, employer health benefits are tax deductible, as they have been since the Second World War. This amounts to a huge subsidy for employer-based health insurance and is the reason why the workplace is at the center of our health insurance system. Eliminating that subsidy will make employer-based health insurance $3.6 trillion more expensive. The effects of that on the health insurance market will be felt in full: Huge numbers of employers will stop offering such insurance. Many more will sharply raise the worker contribution, or drastically cut benefits.

In Health Affairs, Thomas Buchmueller, Sherry A. Glied, Anne Royalty, and Katherine Swartz estimate that a full 20 million Americans will lose their current coverage as a result of the tax hike. 20 million. And they say that’s a low estimate. …

That is the first piece of the McCain health plan: A massive increase on employer-based health insurance that is meant to drive people out of that market. It is not a bug. It is the central feature, the crucial mechanism, that powers the policy.

Obama hammered home the message on Saturday, in Virginia:

So here’s John McCain’s radical plan in a nutshell:  he taxes health care benefits for the first time in history; millions lose the health care they have; millions pay more for the health care they get; drug and insurance companies continue to profit; and middle class families watch the system they rely on begin to unravel before their eyes.

Well, I don’t think that’s right. I don’t think we should settle for health care that works better for drug and insurance companies than it does for hard working Americans.

Let the voter beware.


6 Comments (+add yours?)

  1. McSwain
    Oct 06, 2008 @ 20:05:06

    What do you think of Canada’s healthcare system? I’d be curious to hear about it from someone who lives there…


  2. Bridgett
    Oct 06, 2008 @ 20:14:05

    Me too–the few Canadians I know have said things like “I’d hate to have to make the choice between eating and taking my medications” and a few young mothers who thought it sounded overwhelming to pay for vaccinations and well baby care. But what do you think?

    Not that our corporate-run america will ever let that happen. Damn it.


  3. Stephen
    Oct 06, 2008 @ 21:00:37

    There’s no simple answer to that question.

    On the positive side, Canadians take great pride in our government-insured healthcare system. It’s weird, but our universal healthcare system is viewed as a core element of Canadian identity — right up there with the Charter of Rights and Freedoms!

    It’s part of the Canadian value system that we look after one another. Poor people should get access to the same level of healthcare as rich people. Which isn’t strictly the case — money can buy immediate access to some healthcare services that ordinary folks have to wait in line for. But as a general rule, the “social safety net” is firmly in place when it comes to essential healthcare services.

    People don’t die because they can’t pay for care. People don’t lose their homes because of healthcare debts. Healthcare is “free” — i.e., government pays for it.

    To summarize the positives: Canadians are generally satisfied with the healthcare services we’re receiving. We take great pride in the fact that no one is denied essential healthcare services here — money doesn’t enter into it. And we do find it grotesque when we hear that Americans who are fighting for their lives are simultaneously plunged into a financial crisis.

    On the negative side —
    Every Western country is facing the same problem: healthcare costs are rising faster than our economies are growing. Each year, a bigger portion of government budgets are eaten up by healthcare costs. Healthcare thus eats into other budget lines — education, upkeep of roads, or whatever. Obviously that trajectory can’t continue unchecked forever.

    And we have our horror stories too: e.g., emergency rooms that have people on gurneys in the hallways for hours and hours, waiting to be seen by a doctor.

    Wait times are another major challenge. Canadians also complain that the wait for some kinds of services is too long:

    Women in Gatineau [Quebec] are waiting up to five months for a diagnostic X-ray to find out if they have cancer after abnormalities are found in their breasts. …

    Outaouais region health authority spokesman Dr. Guy Morissette … blamed the long waits on the fact that the Gatineau hospital is short seven to 10 X-ray technicians.

    [A shortage of healthcare professionals is a chronic problem.]

    But he said women are being sent to other hospitals so they can get the mammograms within the recommended waiting period if doctors think their case is likely to be cancer.

    “The women that will have to wait four or five months are people that we’re pretty sure that it’s a cyst,” he said.

    A cyst is a lump filled with fluid that is usually harmless.

    In the end, healthcare is a limited resource and the demand is outstripping the supply. I don’t think any Western country has found an adequate solution for that problem yet. But Canadians remain convinced that our system works better than the American system.


  4. James Pate
    Oct 07, 2008 @ 18:21:52

    My impression from Canadians I’ve talked too is that those who don’t have to use the health care system that often are fairly satisfied with it.


  5. John Q Canadian
    Oct 08, 2008 @ 08:47:35

    Even those that do have to use it are quite satisfied. In the last few years I have had CT scans MRI’s and a smalll operation on my foot. My mother has had a cancer operation and my uncle a heart attack. All of these proceedures have been done timely and well as far as I can tell the quality and timeliness of service has been more than adequate. I’m not saying that there hasn’t been times when waiting periods have increased but the right tends to exagerate this to support thier case for a two tiered system, which will only benifit the doctors incomes, and personally I could care less as I think they are paid adequately for what they do. If we were talking about people in the cleaning industry or fast food service I would feel sorry for them but I refuse to feel sorry for anyone that drives an Escalade and owns a cottage. I think that universal healthcare is an esential even for the USA. It is time that Healthcare was again about helping people not greed.


  6. Stephen
    Oct 08, 2008 @ 16:59:51

    Thanks, JQC. I’m thankful to say that I’ve had only minimal need of the healthcare system, so I haven’t put it to the test.


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