McCain's health care plan an unmitigated disaster

Senator McCain is coming to Denver on Friday to speak at a Town Hall meeting about health care. If I was Senator McCain I think I'd avoid talking about my health care plan, especially in forums that are open to the public. McCain rolled out his plan yesterday. From the NY Times,

Mr. McCain’s health care plan would shift the emphasis from insurance provided by employers to insurance bought by individuals, to foster competition and drive down prices. To do so he is calling for eliminating the tax breaks that currently encourage employers to provide health insurance for their workers, and replacing them with $5,000 tax credits for families to buy their own insurance.

So McCain is going to remove the financial incentive for employer based care, forcing individuals to buy their own insurance. To help individuals pay for that insurance he's offering a $5,000 tax credit. That could be reasonable, what does an average health care plan for a family with no pre-existing conditions run nowadays anyway? The New York Times article explains,

The average cost of an employer-funded insurance plan is $12,106 for a family, according to the Kaiser Family Foundation, a health policy group. Paul B. Ginsburg, the president of the Center for Studying Health System Change, a nonpartisan research organization financed by foundations and government agencies, said, “For a lot of people, the tax credits he’s talking about would not be enough to afford coverage.”

Oh my. So John McCain's "plan" is to encourage your employer to ditch your insurance coverage and then give you a tax credit that only covers 41% of the costs for a new plan. I guess we're just supposed to check the couch cushions for that extra $7,106?

This "plan" is nothing of the sort and will do far more to damage to our already broken health care system than it will to fix it. McCain's plan will force tens of millions of middle class Americans from the ranks of the insured into the ranks of the uninsured. With gas, food, heating and housing costs ballooning John McCain wants to stick working Americans with a $7,000 bill.

What about people with pre-existing conditions? You know, people like John McCain. Well, he's thought about them and instead of getting people with pre-existing conditions who can't buy individual coverage involved in some icky government health care plan (you know, like the one John McCain has spent his entire life covered by) he'll encourage the Federal government to work with the states to find a solution.

Mr. McCain’s speech here implicitly acknowledged some of the shortcomings of his free-market approach. But rather than force insurers to stop cherry-picking the healthiest — and least expensive — patients, Mr. McCain proposed that the federal government work with states to cover those who cannot find insurance on the open market. With federal financial assistance, his plan would encourage states to create high-risk pools that would contract with insurers to cover consumers who have been rejected on the open market.

Well these high-risk pools already exist in some states so what do they look like in action? The New Republic's Jonathon Cohn explains,

To put this in more practical terms, I contacted Karen Pollitz, a research professor at the Georgetown University Health Policy Institute who has done some of the most detailed studies anywhere on high-risk pools and the individual market. Specifically, I asked her to consider what McCain's plan would--hypothetically--do for the person who has given him the most political grief lately: Elizabeth Edwards.

It turns out that North Carolina, where Edwards lives, doesn't actually have a high-risk pool in operation right now. (It hopes to launch one next year.) But neighboring South Carolina does. Pollitz was able to track down published figures with the rates the South Carolina pool would charge a 50-year-old man. (Edwards, a 57-year-old woman, would actually pay more.) And according to those figures, Edwards' most cost-effective option would be to choose a plan that had monthly premiums of $867 for six months, followed by $693 every month thereafter.

That plan comes with a $1,500 deductible; in other words, every year Edwards would have to pay $1,500 in medical bills before the insurance kicked in. After that, she'd have to deal with the cost-sharing until she had spent another $3,500 out of her pocket.

If you do the math, you'll see that means Edwards would end up paying more than $14,000 a year in insurance and out-of-pocket medical expenses. (At least for now. The rates go up in July.)

But wait--there's the small matter of her cancer treatment during those first six months, which South Carolina's pool, like the rest, wouldn't cover at all. (And, no, those expenses wouldn't count towards the deductible or out-of-pocket limits, either.) Given the high cost of cancer care--some drugs cost $10,000 a month--Pollitz says that her expenses could easily reach $100,000, although it'd be less if Edwards is no longer getting intensive, cutting-edge treatment.

Edwards, who is wealthy, can afford to pay those bills. But most cancer patients can't, and as Pollitz notes, "If you have cancer, if you have a tumor growing in you, you can't just let it grow for six to twelve months while you wait for the pre-existing waiting period to run out."

So John McCain's health care plan amounts to a $7,000 bill for healthy middle-class Americans who currently enjoy employer based coverage. If you're sick John McCain's plan amounts to tens of thousands of dollars in out of pocket costs. McCain's plan for both the healthy and those with pre-existing conditions will simply force more and more Americans into the ranks of the uninsured, further exacerbating our health care crisis and sending overall costs higher and higher still. This is a bad deal all the way around and will actually further wreck our health care system. Costs will escalate, forcing more to forego insurance and ensuring that only the healthy and wealthy can access the U.S. health care system.

It's really something that a man who has led the life that John McCain has is running around bashing government and government health care. McCain is the son of a career military man, meaning he grew up in military housing and his health care coverage was provided for by the U.S. government and his family's income came from checks signed by Uncle Sam. McCain then attended the government run Naval Academy. When he graduated as an officer he was again covered by health insurance provided for by the U.S. government and received his pay check from the U.S. government. After leaving the Navy McCain ran for office and became a U.S. Congressman, where again his health care was provided for by the U.S. government and his paycheck again came from Uncle Sam. In short John McCain has never received a pay check in his life that wasn't issued by the Federal government and he's never had to find health insurance as he has always been covered by U.S. government insurance. Oh and he's always been treated by the military's truly socialist medical system. A system, I might add, that he has relied upon to successfully treat his cancer.

And yet here we have John McCain the Presidential candidate pandering to his conservative base by decrying the evils of government run health care. A system that he himself has utilized his entire life and a system that has saved his life. What is there to say about such a man?