Actually, Cato, McCain’s Health Care Plan Really Is That Bad»

An analysis of John McCain’s health care plan by Cato Institute’s Michael F. Cannon argues that “Sen. McCain’s plan is a lot better than his critics suggest.” We disagree. Here’s why:

Cannon argues that, contrary to Elizabeth Edwards’ claim that McCain’s embrace of the private market wouldn’t secure coverage for people with pre-existing conditions, “the individual market covers lots of people with high-cost medical conditions — so long as they purchased the insurance when they were healthy.” Not only that, but “those high-cost patients do not pay premiums that correspond to their health risk, and their coverage does not disappear when they change jobs.”

But Cannon, in his enthusiasm to defend McCain, overlooks some important facts:

McCain’s Plan Would Weaken The Ability Of Sick People To Keep Their Private Insurance: The main reason (not mentioned by Cannon) that some people who develop health problems can renew their health insurance without seeing higher premiums is federal regulation through the Health Insurance Portability and Accountability Act (HIPAA). States have improved on these regulations, offering more protections to sick consumers of private health insurance, but John McCain, in his push for an unregulated national market, would undermine these additional protections.

McCain’s Plan For The Uninsurable Is Woefully Inadequate: While only 5% of non-elderly Americans participate in the individual insurance market, 56 million chronically ill people are currently covered by employer-based health insurance plans, which can absorb the cost of these high-risk individuals because their pools are diversified. McCain would eliminate the tax incentive to keep these plans active, and nudge many of these folks into the private market where insurers would be reluctant to cover them. McCain’s answer? Dubious “high-risk” pools. Cato’s answer? Thoroughly debunked “Health Savings Accounts.”

There Are Better Alternatives That McCain Opposes: Cannon argues that McCain’s plan “provide more secure coverage of high-cost conditions than the current job-based system does” — but the way to provide the best security is a method which McCain adamantly opposes: offer a competing non-discriminatory, flexible alternative to employee based coverage by letting any American join a system like the one members of Congress use to get their insurance.

As the Des Moines register editorial board opined, McCain’s “dangerous experiment…should scare the heck out of the millions of Americans who rely on employer-based coverage.”

Goodman Misfires In Response To Elizabeth Edwards»

Elizabeth Edwards has gotten a lot of attention lately for her statement that neither she nor Sen. John McCain would be able to get coverage under McCain’s health plan because they have both had cancer. Recently, a conservative blogger tried to counter Edwards, but he just misses the point. The comments of John Goodman, President of the National Center for Policy Analysis, are either uninformed or just intentionally misleading:

GOODMAN: “Elizabeth Edwards apparently thinks insurance companies should have to insure cancer victims even if they were willfully uninsured and paid no premiums during all the years when they were healthy.”

Wrong. Edwards has said time and again that everyone should be expected to take responsibility for themselves and enroll in affordable health insurance. Goodman wants to ask Edwards a series of questions about the kind of health system she wants, but it’s easy. It’s called universal coverage.

GOODMAN: “In the Elizabeth Edwards’ world, by contrast, health plans would try to avoid the sick and if they failed at that, their incentives would be to under provide care.”

Wrong. That’s the world we live in today; the world that Edwards wants to change. The reality is that pre-existing conditions make it hard, if not impossible, for people to get health insurance in the individual market that McCain is promoting. The Democratic reform proposals call for guaranteed issue, so everyone can get insurance, regardless of their health status. And even though McCain has turned his back on patients by supporting a marketplace free of insurance company oversight, Democrats still support a Patient’s Bill of Rights to make sure managed care plans put people before profits.

GOODMAN: “Any Senator or Senator’s spouse who has been participating in the federal employee’s health program cannot be denied coverage by any subsequent employer plan or in the individual market. This guarantee also applies to every other American who is currently in an employer plan under federal law.”

That’s overstated. The Federal government has a 52-page guide explaining insurance coverage protections, and it is clear how individuals’ legal protections are limited. For many Americans, their ability to retain coverage as they change jobs or move from group to individual coverage are determined by the type of coverage they have and the benefits it covers. And for those who can’t afford coverage as they leave a qualified employer plan, those protections disappear completely after 63 days.

Edwards makes an excellent point. John McCain is promoting an individual market with few protections. By pushing more people into that market, McCain puts everyone at risk. Sure, US Senators and their spouses, as Goodman points out, have strong protection. But we need a system that works for everyone.

Elizabeth Edwards On Health Care: ‘This Is Not A Cheap Shot; It Is Potentially Life And Death’»

Our guest blogger is Elizabeth Edwards, a Senior Fellow at the Center for American Progress and wife of former Presidential candidate John Edwards.

John McCain accused me of taking a “cheap shot” on “This Week with George Stephanopoulos” yesterday for noting that people with preexisting conditions, such as he and I have, would not be able to get health care under his plan –- and that he perhaps was not as sensitive to this problem as he should be since he has been in government health care his whole life.

Sen. McCain noted that he was not receiving government health care for the six years he was in captivity. That is true. But it has nothing to do with my point — which is that the problem with Sen. McCain’s health care plan is not how it affects us –- but how it affects the tens of millions of Americans with preexisting conditions who, unlike Sen. McCain and myself, do not have the resources to pay for quality health care.

That is not a cheap shot, it is a potentially life and death question for tens of million of Americans. And it is a question Sen. McCain must address.

McCain’s health care plan is centered around the idea that we’d be better off if more Americans bought health coverage on their own, rather than receiving it through a job or government program. But maybe since he has never purchased insurance in the individual market, he does not know the challenge it presents for Americans with preexisting conditions.

A recent study showed that nearly nine out of every ten people seeking individual coverage on the private insurance market never got it. Insurers will disqualify you for just taking certain medicines because of the possibility of future costs, including common drugs as Lipitor, Zocor, Nexium, and Advair. People who have had cancer are denied coverage and those who get cancer run the risk of simply being dropped by their insurer for any excuse that can be found. And insurers make it a practice to deny coverage to individuals in high risk occupations, such as firefighting, lumber work, telecom installation, and pretty much anything more risky than working in an office.

McCain opposes universal health care because he claims it represents a “big government takeover and mandates.” But yesterday, he said he would help cover people with preexisting conditions by creating a “special Medicaid trust fund.”

A “special Medicaid trust fund”? Talk about a big government takeover. Tens of millions of Americans have preexisting conditions. If he is going to expand Medicaid to cover Americans with preexisting conditions, he is talking about a massive, massive increase in the Medicaid program. He says he opposes more government involvement in health care, but his idea really would be government-run health care.

My questions is: why is he doing this? If he is so concerned about expanding government’s role in health care, why doesn’t he just tell the insurance industry that they have to cover people with preexisting conditions? Why is he more concerned about protecting the insurance industry –- an industry which, by the way, his corporate tax cut plan gives a $1.9 billion tax cut to –- than the tens of millions Americans with preexisting conditions?

McCain’s advisors still can’t say how this special Medicare trust fund will work. I gather we will find that out when Senator McCain gives a speech on health care later this month. Rest assured, I will be paying attention.

UPDATE: Watch the video here.

Elizabeth Edwards To Join Wonk Room As Health Care Blogger»

On Tuesday, the Center for American Progress and the Center for American Progress Action Fundannounced that Elizabeth Edwards would join the both organizations as a Senior Fellow, and that she will also be contributing regular posts on health care policy to CAPAF’s Wonk Room. In an interview with the New York Times, Edwards cited the importance of the fight for health care reform, saying “I don’t want to put down the sword until we get the job done.”

Last week, Edwards wrote here that Sen. John McCain’s (R-AZ) health care plan would leave both the him and Edwards herself “outside the clinic doors” because of their preexisting condition — cancer. “Doesn’t your plan really encourage insurers’ plans to compete to avoid people with cancer or other high-cost diseases?” she asked McCain.

Last night on Countdown with Keith Olbermann, Edwards described what she called “a gulf…a solar system of difference” between Sen. John McCain’s (R-AZ) health care plan and progressive proposals. She also discussed McCain’s enormously regressive corporate tax policies, which dole out nearly $2 billion to the biggest health insurance companies and $3.8 billion to oil companies.

Watch it:

Despite her concerns about the “pressure” of contributing to a hard-hitting news blog, the Wonk Room is thrilled to welcome Elizabeth Edwards, and we look forward to the insight and clarity she will offer on this integral issue.

Wall Street Journal’s Joseph Rago Seems Confused About McCain’s Health Care Plan Too»

Our guest blogger is James Kvaal, Domestic Policy Advisor at the Center for American Progress Action Fund.

The debate continues: Joseph Rago of the Wall Street Journal argues that Sen. McCain “ought to welcome” Elizabeth Edwards’ criticisms of his health care plan. As Edwards says, McCain lets insurers discriminate against people with costly diseases – ironically including McCain himself.

But Rago says that’s okay for three reasons. First, Sen. McCain would create a government backstop for expensive cases. Sounds good, but the devil is in the details – and McCain aides are still “scrambling to come up with ways to satisfy those who want more coverage without violating what they call McCain’s conservative principles.” I’m sure it’s hard to create a new government backstop for millions while also “shrinking government’s role in health care.”

Second, Rago says the McCain plan lets people carry their coverage from job to job. But you can’t keep coverage you never get, and the individual market is fundamentally broken for millions of people.

Finally, Rago says the McCain plan would lower costs. But by leaving millions uninsured, the McCain plan drives up costs by raising administrative costs and undermining preventive care and other efforts to keep costs down.

McCain wants more people to buy health coverage on their own, and his plan might work for families who are healthy and upper-income. But shouldn’t health reform start with people who need help most?

Why Elizabeth Edwards Is Right»

In recent days, Elizabeth Edwards has argued that John McCain’s health care plan would make it impossible for many Americans to get health insurance because of their preexisting illnesses – illnesses like the ones that Edwards and McCain suffer from themselves. She’s right.

Paul Krugman today called McCain’s approach “voodoo health economics.” McCain asserts that the insurance industry, once free of regulation, will provide sufficient “supply” of insurance to cover everyone. That’s wrong. The reality is that McCain himself – if he did not have access to government health insurance – would struggle to find health care under his own plan.

McCain – driven by his extreme free-market ideology – has written a health care plan that leaves individuals at the mercy of insurance companies’ profit motive. Insurance companies have strong incentives to avoid covering people who need health insurance the most – sick people. And McCain has been unwilling to build in consumer protections, saying “That would be mandating what the free enterprise system does.”

Like many conservatives, McCain believes in leaving people on their own to figure out the health insurance market. Instead of supporting group health insurance (i.e., employer and public coverage), he believes in tax credits that could be used in the individual market. In fact, the whole goal of his free market approach seems to be to grow the individual market.

Yet, the individual market is the Wild West for consumers with relatively few protections, as Georgetown research highlights. The individual market is so dysfunctional that 89 percent of those that tried to get individual coverage ultimately never bought a plan, according to a 2005 Commonwealth Fund study.

The reason is that insurance companies do everything possible to eliminate their financial risk. Although McCain has yet to release his health records, he has made public his fight with skin cancer. Ordinary people with cancer, let alone those in their 60s when McCain was treated, are considered “bad risks” and can in most states be denied or charged more for coverage in the individual market, which McCain says is a key part of his reform plan.

In fact, insurers will disqualify you from coverage even for just taking certain medicines because of the possibility of future costs, including the most common drugs as Lipitor, Zocor, Nexium, and Advair. People who have had cancer are denied coverage and those who get cancer run the risk of simply being dropped by their insurer for any excuse that can be found. And insurers make it practice to deny coverage to individuals in high risk occupations, such as firefighting, lumber work, telecom installation, and pretty much anything more risky than working in an office.

For taking on even minimal risk in the individual market, insurers charge a high premium. Of those in the Commonwealth Fund study, 71 percent of those with health problems found it difficult or impossible to find affordable coverage, as compared to about half of those with no health problems. Even the healthy only have a 50/50 chance of finding affordable individual coverage. As Nancy Metcalf of Consumers Union recently said, the two solutions to the individual market are to “be healthy or be rich.”

Individual Market Coverage: Barriers Abound
Adapted From Commonwealth Fund study, 2005

In an understated warning, an official state of Arizona publication offers that, “Many claims are denied because of these [preexisting condition] provisions” and explains that a condition can be preexisting even if it was unknown when coverage is purchased.

What would McCain do under his health plan? Without a government promise of coverage, he’d be out of luck. The fact is, Senator McCain’s plan doesn’t work for the average guy—not even himself.

Bill Bennett Must Just Be Confused Too»

You know it’s bad when arch-conservative Bill Bennett won’t even endorse the Republican presidential candidate’s health care plan.

It’s just the latest chapter in Elizabeth Edwards’ effort to explain the facts on the McCain health plan, which started Saturday at her speech to the Association of Health Care Journalists. While there, Elizabeth Edwards pointed out that she and John McCain had something in common, that neither of them would get coverage under his health plan.

This lead to the McCain campaign calling her “confused” in a piece published by the Los Angeles Times, something Edwards responded to on this blog and then this morning on the Today Show.

When Bill Bennett followed Edwards this morning, the best response he could muster was a generic assertion that the free market could cure the country’s health care crisis, saying, “I think a market approach is going to be the better approach.”

He added that what McCain is trying to do is, “unprecedented,” and because of that, “ We don’t know what the market will provide.” Commenting on whether all persons would be covered under the McCain plan, the best Bennett could do is to say, “It is John McCain’s position, and Dr. Coburn’s position [Republican Senator from Oklahoma, whose health idea McCain’s follows], that an influx of that amount of supply [under their plan], if you will, will create possibilities for people that haven’t existed before. So, I don’t think you can rule this out categorically.” Watch it:

We can’t rule out that the McCain plan will help people get coverage? We don’t know what the McCain plan will mean? Wow Bill, there is a ringing endorsement. It was a simple enough question, and Bennett couldn’t give a straight forward answer supporting McCain. Bennett got one thing right though, McCain’s idea of trying to move everyone into the individual market is “unprecedented,” mostly because the individual market is broken and conservative ideas to markets like McCain’s would further weaken individual market protections.

I’ll be waiting for the McCain campaign statement that Bennett must be just as “confused” as Edwards on the merits of the McCain plan.

Elizabeth Edwards Responds: Why Are People Like Me Left Out Of Your Health Care Proposal, Sen. McCain?»

Our guest blogger is Elizabeth Edwards, wife of former Presidential candidate John Edwards.

I freely admit that I am confused about the role of overnight funding in repurchase markets in the collapse of Bear Stearns. What I am not confused about is John McCain’s health care proposal. Apparently Douglas Holtz-Eakin, a senior policy advisor to McCain, thinks I do “not understand the comprehensive nature of the senator’s proposal.” The problem, Douglas, is that, despite fuzzy language and feel-good lines in the Senator’s proposal, I do understand exactly how devastating it will be to people who have the health conditions with which the Senator and I are confronted (melanoma for him, breast cancer for me) but do not have the financial resources we have. In very unconfusing language: they are left outside the clinic doors.

Senator McCain likes to start speeches with a litany of questions that, presumedly, less plain-spoken politicians would refuse to answer. Well, here are some questions he does not ask but, as that plain-spoken politician, he might want to answer:

1. Under your plan, Senator McCain, would any health insurer be required to sell you or me (or those like us with pre-existing conditions) a health insurance policy?

2. You say your plan is going to increase competition to the point that it actually lowers costs. Isn’t there competition today among insurance companies? Haven’t costs continued to go up despite that competition?

3. You say that under your plan everyone is going to pay less for health insurance. Nice words, I admit, but they are words we have heard before. You must know when American families calculate the actual cost of health care, they have to include those deductibles and co-pays and not just the cost of the insurance. Are you talking about cheaper overall or just a cheap policy that doesn’t kick in until after thousands of dollars of deductibles have been paid?

4. Isn’t the type of competition you are talking about really a rush to the bottom? As long as you allow insurers to underwrite and deny access, you encourage insurers to offer plans that may be cheap, but that get that way by avoiding people with cancer or other high-cost diseases or by limiting benefits and treatments, particularly if the treatment is expensive or might be needed for a long time. We all live in the real world; those of us lucky enough to have health insurance have seen how insurers cut coverage and up co-pays or deny particular treatments. The insurance company makes money when it doesn’t have to pay for our health care. (I suspect that if they could, they would write obstetrical-only policies for nuns.) Doesn’t your plan really encourage insurers plans to compete to avoid people with cancer or other high-cost diseases? Don’t you think that the kind of competition that starts with a decent level of required coverage, that doesn’t exclude the care we actually need, would be better?

I am not confused about your reputation: you are the straight-talker, you like to say. This is about health care, Senator McCain. Doesn’t the American voter deserve some straight answers to these questions? As one of those with a pre-existing condition, I sure would like some straight talk.

– Elizabeth Edwards