McCain Plan Would Undermine Americans’ Health Insurance

So Let’s Challenge Conservative Candidates to

Tell Us Which Side They’re On.

THE POLITICS

Health care really matters to people; this issue will provide an important dividing line between candidates. For the most part, Americans want to know one thing about a health care plan: how it will affect them personally. Citizens will be hostile to a plan that pushes them off their current health insurance, and that’s what Sen. John McCain's plan would do. Americans want to lower their health care costs, but the McCain plan would increase those costs for most families.

Now is the time to demand that conservative candidates go on record about health care: Do they endorse the McCain health care plan, yes or no?

THE ISSUE

John McCain spent the week of April 28 to May 2 touting his health care plan. His plan contains few details, but here are the main principles:

1. The McCain plan uses the tax code to push Americans away from the health insurance coverage they get at work and into the individual insurance market. Currently, employer payments for health insurance are not taxable to the employee as income. The McCain plan would end that tax exemption, eliminating the incentive for employer-based coverage. McCain would instead offer a tax credit of $5,000 for families/$2,500 for individuals for health insurance payments, which is nowhere near enough money to compensate for the loss of employer-based coverage. Nine out of 10 Americans with private health insurance—158 million Americans—receive it through an employer. So the McCain plan directly threatens the coverage of more than half of all Americans.

2. The McCain plan fails to require insurance companies to cover patients with preexisting health conditions. Pushing Americans to individual insurance plans means that those with preexisting health conditions—from asthma to cancer—will be unable to obtain affordable coverage. For the 56 million Americans with chronic illnesses who are currently covered by benefits they get at work, the effects would be devastating. McCain concedes this point and now claims he “will work with governors to develop a best practice model that states can follow” to create health insurance products for “high risk” patients. However, this fig leaf fails to cover the ugly truth—although 34 states have some kind of high-risk health insurance pool, there are no successful state models for insuring a large number of individuals who are denied coverage because of preexisting health conditions.

3. The McCain plan wipes away nearly all existing regulation of health insurance, leaving us to deal with private insurance companies on our own. The McCain plan would overrule patient protections in state law by allowing people in one state to purchase insurance from any other state. Just as credit card companies moved their operations to Delaware to avoid state regulations, health insurance companies would move to states with the least regulation. As a result, states would “race to the bottom”—eliminating existing regulations—in order to attract those companies. Right now, mammograms must be covered in every state except Utah—we’d lose that. Mental health must be covered in every state except Alaska, North Carolina and Wyoming—we’d lose that. Mothers who give birth are guaranteed a minimum hospital stay in every state except Wisconsin—we’d lose that. Breast reconstruction must be covered in every state except two. Family health insurance must cover adopted children in all states except seven. Chiropractors must be covered in all states but four. There are nearly 2,000 state laws protecting patients from inadequate health insurance—we’d lose them all.

THE ARGUMENT

There are probably a hundred good arguments against the McCain plan. However, in order to be heard, health care advocates need to stick to—and repeat—our very best arguments. It is clear that the top three arguments are:

1. The McCain plan will cause most Americans to lose their current health insurance coverage. 158 million Americans are covered through benefits they get at work and the whole point of the McCain plan is to cut this link and make us all struggle to find individual health insurance plans. Remember the scramble for Medicare drug insurance? This would be 100 times worse.

2. The McCain plan will leave Americans with preexisting health conditions at the mercy of private insurance companies. The 56 million Americans with chronic illnesses wouldn’t even be able to qualify for individual coverage. McCain’s suggestion that he will “work with governors” to save these Americans from catastrophic loss is half-baked, untried and downright dangerous.

3. The McCain plan will increase health care costs for most Americans. First, a $5,000 tax credit doesn’t begin to cover family health insurance, which averages over $12,000 per year. Second, the plan wipes out the group risk pools that keep insurance down for middle-aged individuals and families. Those of us over age 35 would be socked with insurance cost increases.

LINKS

• For Roger Hickey’s article about the McCain health care plan, click here. [1]
• For a progressive health care reform proposal, click here. [2]
• To subscribe to future "Making Sense 2008" Fact Sheets, click here [3].

SOURCES

• McCain plan’s tax credit and plan to “work with governors”: McCain On the Issues [4].
• 158 million Americans with employer-based coverage: Henry J. Kaiser Family Foundation [5].
• 56 million Americans with chronic illnesses: Center for American Progress Action Fund [6].
• 34 states with high risk insurance pools: Health Insurance Resource Center [7].
• Nearly 2000 state laws protecting patients: Council for Affordable Health Insurance. [8]
• $5,000 credit does not begin to cover $12,000 health insurance: Henry J. Kaiser Family Foundation [9].