McCain U: Don't Get Sick

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http://www.americanprogressaction.org/issues/2008/analyzing_mccain.html Overall, the goal is not universal coverage, it's cost containment, Peter Harbage said while introducing McCains health care plan. Harbage, Health Care Policy Advisor at CAPAF, described how McCains plan would allow a $5,000 tax credit for families and $2,500 for individuals with which they could purchase private health insurance and establish health savings accounts. Harbage noted, however, that the tax credit would grow at the rate of inflation, rather than at the higher rate of health care cost increases. He also said that McCain would allow the sale of health insurance across state lines. Currently, states regulate insurance within their borders. Jeanne Lambrew, Senior Fellow at CAPAF, moderated the discussion on health care. Panelists included Karen Davenport, Director of Health Policy for CAPAF; Karen Pollitz, Director of the Health Policy Institute at Georgetown University; and Harbage, filling in for Elizabeth Edwards, also a Senior Fellow at CAPAF. Pollitz set the framework for the discussion by arguing that a successful policy must make health care available, bring down costs, and provide adequate coverage, all the time. She noted that health care costs are unevenly distributed, and the sickest 5 percent account for half of all spending. Pollitz said that a competitive insurance industry will always try to limit insurance for people when they are sick, so the only way to make a competitive insurance market cover people when they are sick is to regulate it. She criticized McCains health care plan for deregulating health care and removing tax credits for job-based coverage, although such coverage currently provides health insurance to many Americans. Pollitz further faulted McCains plan for allowing insurance companies to choose the state in which they are regulated, and therefore choose which set of regulations apply to them. Panelists agreed with Davenport when she commented, for people with disabilities or chronic disease, those tax credits are going to be inadequate to pay for their insurance. McCains proposal would establish Guaranteed Access Programs, through which the federal government would work with states to provide coverage to those with pre-existing conditions. Pollitz noted, however, that the $10 billion McCain proposes to spend on these programs is only about 1 percent of the funding necessary to provide health care to this population. Panelists also agreed that McCains health care plan would benefit insurance companies. One of the top groups that would benefit from this plan is the insurance industry itself, remarked Harbage. As a factual matter, the individual market is more lucrative for insurers than the group market, he said. Davenport noted, its a fallacy to think that individuals are going to have the kind of bargaining power they need to find the insurance policies that meet their needs. Its called consumer choice, its really insurance company choice, said Pollitz. I think that people want good choices, and this plan offers them a lot of bad choicesand when they get sick, no choices at all.