Senator McCain Takes a Look Through the Microscope

On the stump in Cleveland, Ohio, Republican presidential nominee Senator John McCain appealed to health care voters on his "Call to Action" tour. Emphasizing the need to mitigate costs and increase access to health care, the presidential candidate laid out his comprehensive health care plan behind the pulpit of the Cleveland Clinic, the world-renown medical research center in the heart of economically-depressed America. In an attempt to better understand the presidential candidates' health care plans, the Cleveland Clinic extended an invitation to Senators Hillary Rodham Clinton and Barack Obama. However, since the Democratic Party has yet to determine its presidential nominee, Clinton and Obama will speak at the Cleveland Clinic later this year.

With a cut-away shot of a multicultural palette of white-vested doctors and "scrubbed-in" nurses, Senator McCain's campaign did a very good job of making McCain's health care plan look like it was backed by the medical community. Offering health care reform that returns the choices to the people, McCain outlined a proposal to grant a "$5,000 tax credit each year for families who pay for health care insurance out of their own pockets ($2,500 for individuals)." Unfortunately, as nonpartisan FactCheck.org points out, this tax-incentive-based policy could deter employers from offering comprehensive health care plans. The fear is that shifting the tax rebate from the employer to the employee would cause employers to reduce or eliminate their existing health care plans, which would greatly affect the estimated 61% of Americans who receive health care benefits through their employers.

Despite McCain's detrimental health care proposal, there is hope! Thanks to separation of powers and checks and balances Senator McCain's health care proposal may not get anywhere in Congress, or it may take him forever to get anything passed! However, with the example of President Bush's abusive eight year relationship with executive power, Senator McCain could issue an executive order mandating his health care plan. If the Democrats can maintain control of the Congress and achieve the vital 60 votes in the Senate, though, McCain (and health care) won't be going anywhere. Of course, this is all on the assumption that Senator McCain survives through November. Who knows, maybe the invisible hand of the electoral college will prevail once again.

Massachusetts: Not so universal health care

Robert Laszewski at Health Care Policy and Market Review sounds off on the recently released details of the individually mandated health care reform in Massachusetts. Laszewski believes there is too much of a rush to call the reform a success, saying "The only place there are more victories being declared than in Iraq these days is in Massachusetts."

Facing cost issues, The Commonwealth Health Insurance Connector Authority plans to exempt 20% of uninsured adults from the new state requirement to buy health insurance. Costs are simply too high to enforce a mandate for everyone. An estimated 60,000 people who are low income but do not qualify for state subsidies still will not be able to afford health insurance.

Under the program, a family of three earning $50,000 per year will have a health insurance plan available to them but it will cost about $7,000--and that plan has a $2,000 per person deductible. Before the Connector's ruling on exemptions, that was mandatory. Now, a family making $50,000 is exempted from the mandate if it can't find a plan for less than $3,840 per year. Based upon the "Connector's" health insurance rates, they won't find one.

To keep some perspective on the matter, those exempted constitute only about 1% of the state's population. The problem is, the people in that 1% are among those who need health insurance most. The Massachusetts plan is not a bad one, Laszewski concludes, but the issues coming up now show that states can't pull off universal health care alone.

The lesson is that a state cannot do it all by themselves.

In Massachusetts, the good news is that the glass is half full--a lot of people will have coverage who didn't before particularly between 100% and 200% of the federal poverty level.

The bad news is that the glass is half empty--lot's of people have been "exempted" from the new universal health care coverage mandate but still can't afford it. And on this point, Massachusetts has hit one big brick wall--and they don't have the means to go further.

That isn't trash talking. It is the reality we all need to face when trying to understand what the Massachusetts health care reform law means to the rest of us.

Links:
Laszewski: Another Victory Declared in Massachusetts--The Connector Exempts 20% of Uninsured State Residents From the Requirement to Buy a Health Plan
Boston Globe: Health plan may exempt 20% of the uninsured

Democratic Frontrunners go Head-to-Head on Health Care

On March 27th, the Center for American Progress and the Service Employees International Union sponsored a forum on health care at the University of Nevada Las Vegas. All presidential candidates were invited to speak; Senators Hillary Clinton, John Edwards, Mike Gravel, Barack Obama, Representative Dennis Kucinich, and Governor Bill Richardson were in attendance. Candidates spoke briefly about their plans for health care, then fielded questions from moderator Karen Tumulty (TIME Magazine) and from the audience.

Hillary Clinton

Health care veteran Hillary Clinton didn't shy away from her rocky past with universal health insurance. In reference to the unsuccessful attempts of the Clinton Administration to reform health care in 1993, Clinton said the following,

Now, I am proud we tried. We may not have succeeded, but we set the groundwork in place so that now people are saying, boy, we wish we had done that back then because costs have continued to increase...I know probably better than anybody how hard this will be. Yeah, I know. I've got the scars to show for it and I've been through it, but that just makes me more determined. But it also makes me understand what we're up against...

On the issue of financing, Clinton didn't make a commitment to either employer mandates or individual mandates, but did mention the need for a complementary government-sponsored program to accompany any employer- or individual- based programs. She emphasized controlling costs by ending insurance discrimination (known more objectively amongst economists as adverse selection*) through risk pooling, by transitioning to electronic medical records, and by emphasizing preventative treatment. Clinton also mentioned increasing compatibility between record-keeping technologies around the country as well as the potential of "cafeteria" style insurance in which individuals are able to purchase only the coverage they choose.

In order to implement reform, Clinton also acknowledged the need for public and legislative political support.

We're all going to have plans, that's not in doubt. We need a movement. We need people to make this the number one voting issue in the '08 election to send a message to the Congress and the special interests, we're serious and we're going to get it done this time... But if we don't have the support to get a bill through the Congress, we can keep talking about universal health care coverage, and the number of the uninsured and the underinsured will keep going up, and we'll keeping spending more money and we won't have very much to show for it. So we don't only need candidates to talk about it, and we don't just need candidates to have a plan.

John Edwards

John Edwards' plans featured more specifics. He proposed an employer mandate "play or pay" system with government-regulated "health care markets" in which consumers can choose between government or privately provided health care. Such markets are meant to foster increased competition and thus help to lower overall costs of insurance provision. Much like Senator Clinton, Senator Edwards' other plans for cost control include mandatory preventative care as well as electronic record keeping. Although cost control is a main feature, Edwards is upfront about what it will take to fund reform. He proposes rolling back Bush Administration tax cuts in order to fund these health care markets as well as to support subsidized insurance for low and middle income families that make less than $80,000 a year.

We don't get universal health care for free. You have to cover 47 million people who don't have coverage. There's going to be a cost associated with the transition from the health care system we have today to a truly universal and more efficient health care system. So, no, I do not believe it can be achieved without finding an additional source of revenue. And the joke I always make about it is that American people have heard so many politicians for so long say, Oh, we're going to have universal health care, we're going to transform the way we use energy in America, we're going to end poverty in America, and in the process we're going to eliminate the federal deficit. They probably got a bridge in Brooklyn they want to sell you too. I don't think it could be done.

Barack Obama

Wunderkind Barack Obama offered the fewest concrete details. He explained that the relative newness of his presidential campaign at the time meant that his position on the issue was still in development.

Well, keep in mind that our campaign now is I think a little over eight weeks old. And so we will be putting a very detailed plan on our website... we have a plan that we are in the process of unveiling. What we want to do is try to set up a series of round table discussions before we actually announce it. Not just with experts, which we've already done, but rather with frontline workers, with nurses, with doctors, with consumers, which we're going to be scheduling over the next couple of months in terms of rolling it out.

The Senator assured listeners that he would carry out health care reform within his first term with some mixture of financing from employers, government, and individuals. Like Clinton, Obama did not yet have a stance on the employer or individual mandate systems but mentioned support for a complementary government system. He also spoke generally about the need for risk pooling, "front end" funding to reduce costs in the long-run, increased quality and efficiency of care, preventative care, and the "application of medical technology". Obama was a little more emphatic on the topic of political support,

...what I think is most important is we recognize that every four years we hear somebody has got a health care plan. Every four years somebody trots out a white paper, they post it on the web. But the question we have to challenge ourselves is do we have the political will and the sense of urgency to actually get it done...Now, I just have to repeat something I said earlier. And I'm absolutely convinced of this. The most important challenge for us is to build a political consensus around the need to solve this problem.

*For some economic background on adverse selection, see Akerlof, George A. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism." The Quarterly Journal of Economics 84 (1970): 488-500.

Big Business holds hands with Bleeding Hearts

Today's New York Times Magazine includes an article about an interesting twist in the politics of health care - a surge in the popularity of universal health insurance among not only liberal elements, but also among corporate head honchos.

The movement for universal health care has long been seen as a liberal cause. Current proponents include such lefties as Senator Ron Wyden (D) of Oregon, and Andy Stern, President of the Service Employees International Union. What's curious is the unexpected allies the movement has recently found in leaders of big business.

Steve Burd is one of these new allies. Two years ago, the chairman and CEO of Safeway supermarkets became notorious for his hard line denial of increased medical benefits for California's grocery workers. Yet for the past year, Burd has been collaborating with Wyden on a near weekly basis to formulate the Senator's proposal for universal health insurance. Standing alongside Senator Wyden in a news conference, Burd said the following:

Our nation is facing a crisis that requires immediate attention. Working together, business, labor, government, consumer groups and health-care providers can collectively solve this problem.

Burd's not alone. Lee Scott, CEO of Wal-Mart, The Business Roundtable, one of Washington's most influential business groups, and Howard Schultz, the chairman of Starbucks, have all come out in support of universal health care. Burd is determined to see the plan through and has even formed a non-profit called the Coalition to Advance Health Care Reform, which is comprised of various companies and corporations. The group goes public this spring.

While the marriage of liberal and traditionally conservative elements is unorthodox, the motivations behind it are hardly a mystery. With small profit margins and rising insurance costs, businesses are looking to rub the responsibility for employee health care off onto the government. Who knows? With presidential candidates Edwards, Romney, Clinton, and Obama all presenting platforms with universal coverage, something may actually come of these strange bedfellows in the coming years.