An independent study of Sen. John McCain’s (R-AZ) health care plan, published today in Health Affairs, concludes that McCain’s proposal “would almost certainly…increase family costs for medical care.” Here are the details:
MCCAIN PROPOSAL: Eliminate the current tax exclusion for employer-sponsored coverage.
CONSEQUENCE: Twenty million people would lose coverage, but “the effect could be much larger.”
– Cost of employers-sponsored coverage would increase. By equalizing the tax status of the individual and group markets, “low-risk employees would have less incentive to remain in employer-sponsored groups,” would leave the employer-risk pool, increasing costs for those left behind.
– Employers could discriminate against workers. Employers would no longer have to abide by rules “which require firms to provide similar benefits to high-and-low wage employees.”
MCCAIN PROPOSAL: Push Americans into the unregulated individual market.
CONSEQUENCE: Americans will have “far less generous policies that those they have today.”
– Nongroup plans are more expensive than group plans. “It is much more expensive to sell insurance to millions of individuals one individual at a time than it is to sell top a much smaller number of employer groups.” For a family that moves from the group to the individual market, “nongroup insurance will raise premiums for an identical policy by more than $2,000 per year.”
– Cheaper but less substantive policies. Insurance providers could have an incentive to develop “bare-bones” insurance policies costing little more than the $5,000 tax credit for families…however, for most uninsured families, the benefits of such policies in terms of protection from financial risk and access to medical care would likely be very small…”
– Less healthy people will not find coverage. According a recent survey, less healthy individuals found it almost impossible to find affordable coverage in the individual market.
– High-Risk Pools will only cover 3 million people. McCain has proposed to fund his Guaranteed Access plan to the tune of $7-10 billion, which could only cover three million people and leave millions without affordable insurance.
MCCAIN PROPOSAL: A national insurance market in which insurance could be purchased across state lines.
CONSEQUENCE: Consumers would lose important protections “designed to establish minimum levels of coverage.”
– Important consumer protections will be lost. Companies will charter in states with scarce regulations, and will no longer have to provide mental health parity, cancer screenings, or abide by regulations that “limit the rates that can be charged to higher-cost consumers and that limit who can be excluded for a health plan.
Under McCain’s plan, “upward of forty million Americans would be uninsured — and that number would likely grow over time.” In fact, since McCain’s health care tax credit would “not automatically adjust as health care costs increase,” Americans will have to stretch their credits to afford the same coverage every year.
As columnist Bob Herbert notes in today’s New York Times, “this entire McCain health insurance transformation is right out of the right-wing Republicans’ ideological playbook: fewer regulations; let the market decide; and send unsophisticated consumers into the crucible alone. You would think that with some of the most venerable houses on Wall Street crumbling like sand castles right before our eyes, we’d be a little wary about spreading this toxic formula even further into the health care system.”