The McCain Health Plan Explained: Freedom For Insurance Companies

mccainJohn McCain summed up his own approach to health care in a Des Moines speech this way: “I offer a genuinely conservative vision for health care reform, which preserves the most essential value of American lives – freedom.”

That’s health care rhetoric that you could serve up with a slice of apple pie during a baseball game. But freedom for whom? When McCain talks about ‘freedom,’ he isn’t talking about regular families. He means health plans should be free of regulation. (Read Jeanne Lambrew’s piece on what “Conservative Health Reform” means.)

One of John McCain’s central ideas is to free insurance companies from state regulations that protect individual consumers, having said, “You should be able to buy your insurance from any willing provider – the state bureaucracies are no better than national ones.” The not-so-subtle implication is that the marketplace is all that is needed to keep health insurers in check.

McCain’s marketplace, though, would reduce costs for insurers at the expense of people. Two years ago, California’s then-Insurance Commissioner John Garamendi issued a scathing report on the conservative’s reform approach, explaining that insurers could avoid the health plan rules in some states mandating that specific benefits (such as cancer testing and preventive care for children) be offered and that specific providers (such as psychologists) be covered. State rules that help small businesses purchase insurance coverage would also be in jeopardy. Real insurance reform – like prohibiting insurance companies from refusing to cover people with health problems – wouldn’t stand a chance.

McCain’s plan comes at a time when the insurance industry shows that it needs more, not less, regulation. Just look at what insurers are doing with their freedom today.

— In California, the state is considering fines as high as $1.3 billion against PacifiCare for wrongly denying claims.
— In New York, Attorney General Andrew Cuomo is moving against UnitedHealth and others for charging patients too much to see out-of-network doctors.
— California-based Health Net paid bonuses based in part on how successful employees were at canceling (in insurance-speak, it’s called a “rescission”) health policies it had sold to customers that incurred high medical bills.

There needs to be freedom in health care. But John McCain has it all wrong. He would create a race to the bottom as insurers aggressively market health plans from states with the weakest regulations. We should start with the freedom from fear that insurance companies will simply abandon the sick when their care gets too expensive.