McCain’s Cost-Containment Plan: Reduce Access to Health Insurance

mccaincost2.JPGIn a McClatchy story published Sunday on the differences between Sens. Obama’s and McCain’s health plans, Paul Ginsburg, the president of the Center for the Study of Health System Change, describes McCain’s cost-containment measure:

If that tax exclusion is no longer allowed and all I get is a tax credit for $5,000, well, maybe I’ll decide a (cheaper) policy is all I need or all I can afford. I’ll get less health insurance, which means I’m going to be paying more of the cost of care, and that is a cost-containment.

Ginsberg touches on the fundamental conservative approach to containing costs: reducing access to health insurance. But as the Center for American Progress Action Fund has argued, conservative ideas on cost-containment “could deepen our health system crisis.”

The McCain plan is predicated on the idea that everyone is getting too much health care, and therefore, families should have to pay more money out of pocket in order to reduce the amount of care delivered. He also argues that higher cost sharing will lead to greater competition among providers and insurers. But research shows that higher cost-sharing can reduce utilization of needed care. And with little information available on quality of care, and even less information on costs of procedures, there is no way for individuals to become effective purchasers. All of this leaves families disadvantaged. Indeed, there is every chance that the ultimate result will be an increase in costs as opportunities for care management and preventative care are missed.

In addition, McCain would make care even more difficult to obtain because he focuses on using the individual market, which has few coverage standards. Jon Gruber, a Massachusetts Institute of Technology economist, has said:

Indeed, there is evidence that encouraging people to join such health plans might act as salt on a wound, exacerbating some of the very maladies that undermine our health care system’s ability to perform at the highest level.

Certainly, there are bipartisan ideas on cost containment. The Partnership to Fight Chronic Disease has been building support for programs on the Right and the Left to manage and prevent conditions like asthma and diabetes. But McCain’s approach of leaving persons uncovered will weaken any effort at cost containment. As Henry Aaron, a Brookings Institute economist put it, “Covering nearly all Americans is a precondition for effective measures to limit overall health care spending.”