Election evaluation: health care

I really think that political ads should prohibit attacks on the opposing party — that way, we'd all know the facts and in the end, the candidates would feel a lot less battered and bruised. Unfortunately, most people don't do their research and rather, go off of these ads when they head to the polls. That's probably more damaging than the election battle scars.

One key issue is health care. We all need it, yet many of us don't have it. It's a sad story, and strange to comprehend living in the most prosperous country. I've been trying to weed through the muck and find out both candidates' plans for health care. I want to try to be as brief as possible, but also as informative. And I don't want to bore or confuse anyone in the process. Whatever you end up reading, my stuff or someone else's, just get informed.

Please go check out the full articles from which I'm citing. Here's what I've found (I'll start with Obama's plan):

Excerpts by Robert Laszewski of The Health Care Blog~
Barack Obama’s health care plan follows the Democratic template — an emphasis on dramatically and quickly increasing the number of people who have health insurance by spending significant money upfront.

The Obama campaign estimates his health care reform plan will cost between $50 and $65 billion a year when fully phased in. He assumes that it will be paid from savings in the system and from discontinuing the Bush tax cuts for those making more than $250,000 per year.

Highlights:
Obama would make the insurance markets more competitive and efficient by creating the “National Health Insurance Exchange” to promote more efficient competition and he would set a minimum health cost ratio for insurers—not defined in detail. Reducing insurance company overhead is important but constitutes only a small percentage of costs and those overhead costs have been increasing at the rate of general inflation while health care costs have been increasing by two to four times the basic inflation rate in recent years. The biggest cost containment challenge is in the fundamental cost of health care itself.

It would clearly get almost everyone covered sooner rather than later. The real question is how would it be sustained. Are their cost containment strategies going to support a system that is affordable in the long run?

No.

The Obama cost containment proposal is only an incremental cost containment proposal that is layered over $100 billion of upfront spending to cover tens of millions of more people—far too little cost containment for the new massive injection of money, almost overnight, into the health care system.

Obama offers us a long list of good cost containment ideas—most of which he shares with McCain. Most have been underway in the market for many years with limited success. Undoubtedly, a government infusion of resources or requirements aimed at a more efficient system would have a positive impact but it is hard to see how they would be enough fundamentally alter things and bring the system under real control.

More likely, a $100 billion infusion of new health care spending by an Obama plan would actually increase the rate of health care inflation and ultimately create an imperative for more draconian government intervention in the health care markets Obama would preserve.

Cost containment is the big missing link here.

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Over the past month, three independent assessments of the candidates’ plans have been issued from nonpartisan organizations: the Tax Policy Center, jointly run by the Urban Institute and the Brookings Institution; The Lewin Group health consulting firm; and Health Systems Innovation, another consulting practice.

All have have found that the deceptions aired by the Obama-Biden camp are completely that - deceptive. Read the full article at National Review Online (http://article.nationalreview.com/?q=N2E0ODM2ODYyNTUyMWFiNDMzNTgyZDczMWVjNWEzNGY=here). It's author notes that the ads claim that McCain's plan would leave households worse off than they are today and “tax health benefits for the first time ever."

The author, James C. Capretta, continues: "Today, when an employer pays $9,500 for family health coverage, that’s $9,500 that can’t be paid to the worker as cash wages. Exempting that $9,500 health premium payment from federal income tax is worth a lot less than $5,000 for most workers. For instance, for a couple in the 25 percent marginal tax bracket, it’s worth $2,375. The McCain plan would give that couple $5,000 instead of $2,375. Moreover, with the tax credit in place, it doesn’t matter if the employer continues to pay for premiums or gives the worker cash income instead. Either way, the worker will come out ahead. The Tax Policy Center estimates that the average household would enjoy a $1,200 boost in income from the McCain plan."

Ads also claim that McCain's plan would unravel job-based insurance coverage. All three studies show that it actually reduces the number of uninsured, even as coverage through the workplace remains the norm. "HSI estimates the McCain plan would expand insurance coverage to more than 27 million people, or more than half of those currently uninsured. Much of this coverage would come from individuals using the tax credit to buy into the non-group market, but HSI believes even employer-sponsored coverage would expand, not contract."

Here's what the Wall Street Journal has to say about McCain's plan. Read it here (http://online.wsj.com/article/SB122333750424809705.html?mod=googlenews_wsj)
"McCain's proposal —to give every American the tax credit businesses get for buying health insurance — is the right prescription for what ails our health-care system.

McCain recognizes that a large part of the problem is that the tax code favors employer-funded health insurance. The system, which began as a response to FDR's wage and price controls, is built on tax breaks that allow employers to buy health insurance with pretax dollars.

McCain doesn't want to scrap employer-based insurance. He would keep part of the tax deduction in place. But he wants to fundamentally change the way the system works and instead give the self-employed and individuals a tax break for buying their own insurance. There are several advantages to this approach:

Choice. About half of those with employer-financed health insurance have a choice of exactly one plan -- and that plan is often designed to suit the needs of the employer, not the employee. In contrast, under the McCain proposal, families could opt out and join another plan -- perhaps offered by their church, union or trade association -- if it better suited their needs.

Portability. Presently, changing jobs means changing health plans and, often, family doctors. It also means that if a worker loses his job, he can also lose his health insurance. Under Mr. McCain's plan, job status wouldn't necessarily affect health coverage.

Labor mobility. By freeing workers of the need to stay in a job to keep their health insurance, Mr. McCain's plan would help create a more flexible workforce. A study by University of Wisconsin economist Scott Adams found that 20% to 30% of non-elderly men worry enough about losing their health benefits that they stay in jobs they would otherwise leave."