Tuesday, September 16, 2008

20 Million: Give or Take?

Like Paul Krugman who has been beating this drum for some time, I firmly believe that Obama should make accessible health insurance the centerpiece of his domestic platform. Loud and clear. The contrasts between the Obama plan and the McCain plan could not be more stark. Kevin Drum is right on the money riffing off a Bob Herbert column:

A study coming out Tuesday from scholars at Columbia, Harvard, Purdue and Michigan projects that 20 million Americans who have employment-based health insurance would lose it under the McCain plan.

....According to the study: “The McCain plan will force millions of Americans into the weakest segment of the private insurance system — the nongroup market — where cost-sharing is high, covered services are limited and people will lose access to benefits they have now.”

The net effect of the plan, the study said, “almost certainly will be to increase family costs for medical care.”

Remember: this is a feature, not a bug. Republicans think Americans use too much healthcare, and they figure that the best way to fix this is to make it more expensive. So that's what McCain's plan does. It's a pretty typical specimen of the "more skin in the game" plan beloved of conservative think tanks.

McCain's plan removes the tax exemption currently enjoyed by employees receiving employer-provided health insurance. So if your employer provides you and your family with health insurance at a cost of, say, $10,000 a year, under McCain, you will have to pay taxes on that $10,000 "income." McCain seeks to offset this tax increase with a tax credit, but the credit is too small and it's not indexed, so each year the credit will buy less and less health care on the open market. Further, by design, it will create a death spiral spelling an end to widely available employer-provided health insurance. From Herbert:

When younger, healthier workers start seeing additional taxes taken out of their paychecks, some (perhaps many) will opt out of the employer-based plans — either to buy cheaper insurance on their own or to go without coverage.

That will leave employers with a pool of older, less healthy workers to cover. That coverage will necessarily be more expensive, which will encourage more and more employers to give up on the idea of providing coverage at all.

The upshot is that many more Americans — millions more — will find themselves on their own in the bewildering and often treacherous health insurance marketplace.

That would be a marketplace whose insurance providers, quite logically, dedicate tremendous amounts of resources to winnowing out high risk applicants and denying benefits to already enrolled customers who get sick (private insurers are for-profit organizations after all, and paying for health care is a loss taken out of the bottom line). So the older, less healthy workers will be left to the mercy of insureres whose primary mission is to avoid providing them with insurance (unless they can charge such exorbitant rates that the rather sizable risk of paying out large sums to this class of customers is covered). Ezra Klein, as one would expect, provides more information. Klein on the upshot:

But this is the main fact worth knowing, and repeating, about John McCain's health care plan: Its first-order effect would be to take employer health insurance away from 20 million Americans who currently have it. And this estimate is on the low-end. [bold added]

Just what America needs. More than 20 million Americans losing health care coverage at a time when 45 million are already without. On the other hand, non-partisan groups estimate that Obama's health care plan will leave fewer than 20 million Americans without health insurance. In other words, Obama's plan would cover the entire country, less 15-20 million (and even then, that 15-20 million will have access to coverage under the Obama plan, even if they opt not to obtain it).

Put bluntly, the respective health care plans will make the difference in health care coverage for 50 million Americans. That's 1/6 of the entire population. Men and women who have worked their entire lives to contribute to the greatness of this country only to be left without health care during the years that they need it most. Millions of children, left more vulnerable by a Republican Party that for some perverse reason is able to claim the mantle of family values.

[UPDATE: Matt Y's got some useful links as well (assuming he fixes the last one).]

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