Open Enrollment Eye-Opener

On the heels of an explosive political document that has been hitting millions of mailboxes of potential voters— third-quarter 401(k) statements showing how much the Wall Street meltdown has hurt individual retirement savings—another potential game-changer is beginning to brew in employee conference rooms and lunch halls: the annual open enrollment sessions for health insurance benefits.

When workers hear—as I did Tuesday—how much their health insurance premiums are about to rise or what kind of compromises in coverage they will have to accept to keep them from going even higher, a lot of them will be reminded just how hazardous the right-wing plans to remake health care [1] embraced by Sen. John McCain—highlighted in this opinion-page ad [2] in The New York Times on Tuesday— will be to their health.

I got word Tuesday that the premium for the health insurance plan my employer uses will go up almost 17 percent. That will mean a total premium of $463 for individual coverage and $1,296 for family coverage. The premium increase, we were told, would have been closer to 25 percent if we had not agreed to accept up to 50 percent higher co-payments for prescription drugs, which means that a prescription drug will cost us as much as $60 for a 30-day supply.

A McClatchy Newspaper report [3] this week says that "many of the 158 million Americans who receive employer-based health insurance can expect to pay more of the costs" of their health insurance in the coming weeks. Figures from the Henry J. Kaiser Family Foundation [4] actually indicate that double-digit premium increases may not be the norm. Nonetheless, premiums are still about double what they were in 1999, with a family policy averaging $12,680 per year. That repost also notes that in 2008, 18 percent of employees were covered by a health plan that cost at least 20 percent more than the average.

It is in this environment that Sen. John McCain is trying to sell his YOYO (you're on your own) insurance plan, about which he tweaked the language [5] in recent days in the wake of stinging attacks [6] from a number of fronts, particularly the Obama-Biden presidential campaign.

Under McCain's plan, individuals would receive a $2,500 tax credit and families would receive a $5,000 credit. That would have been paid for by imposing a tax on the value of the health insurance benefit, [7] raising its cost for employers and employees. As Sen. Barack Obama noted in the second presidential debate, "what one hand giveth, the other hand taketh away."

Conservative proponents of this idea expect many employers facing higher taxes to drop their health insurance plans, which would force workers to fend for themselves in the private market, where they would not have the advantage of being in a pool where someone is bargaining on their behalf. In that environment, costs would logically be higher or coverage skimpier—that is, if they could get coverage at all. For those with pre-existing conditions that would freeze them out of the private market, McCain offers the vague promise that he will "work with governors to develop a best practice model that states can follow" to set up some coverage of last resort, with assistance for people with incomes "below a certain level."

McCain's website now says [5] that under his plan employers "will continue to deduct the cost of health insurance they provide to employees" (and it adds the confusing statement that "payroll taxes will be protected from taxes" under the McCain plan). The media should ask McCain explicitly about this, because the statement makes it appear as if McCain has abandoned a central pillar of his health care plan when in fact he has not. (At Wednesday night's debate, when Obama pointed out that the U.S. Chamber of Commerce cited the benefits tax as a reason 20 million employers would see their coverage dropped, McCain did not deny that he would would tax those benefits.)

But, most importantly, the fact that the McCain plan appears otherwise intact should alarm ordinary Americans, because for them this simply won't work in their favor.

The most direct impact will be felt when an employer drops coverage and workers take their tax credit to the open market and encounter higher out-of-pocket costs than they would have had under their employer-based plan. Plus, McCain has made it clear that he is not interested in imposing mandates on the health care industry that could help control cost increases or ensure coverage. In fact, by allowing insurance companies to market across state lines, McCain sets the stage for a race to the regulatory bottom that would parallel the migration of banks and credit card companies to low-regulation states starting in the late 1970s. What's being sold now as consumer choice—people being able to shop across state lines for the best insurance deal—would quickly become consumer screwed, a world in which there would be few if any options beyond those offered by companies free to offer low-coverage, high-profit-margin policies.

The quality of the debate that has taken place on health care in the last few weeks of the campaign has not matched the severity of the problem. Some of that is understandable, given that the nation has been preoccupied with a Depression-level economic crisis. But the country has lived in the midst of what is in effect a health-care recession for years now—roughly 47 million people uninsured, tens of millions more underinsured, and the rest facing increases that persistently outpace the rate of inflation. All this while the scary bogeyman of government has been told to sit on the sidelines and watch as health care lobbyists dictate the rules.

But I've got a sheet of paper with a 17-percent insurance premium increase on it and I'm mad. And I need a better answer than a pledge to reform health care "as we have done in banking." In fact, we all do.