Disaster---McCain's health care plan will ruin us all

This may ruffle a few feathers, but I've decided to cross-post this one. --PalMD

As a physician, I have a lot of politically conservative colleagues. Much of this stems from our experience with the government. The influence of Medicare helps set prices, which we are not at liberty to change, and affects how we practice. On the other hand, Medicare is usually pretty good at paying its bills---except when it doesn't. If our costs go up, say in increased rent, we can't raise our prices. And if we get together with a group of doctors to try to negotiate fees, it can be considered collusion, and as such, illegal. So we're in a bind.

On the other hand, the current system of multiple payers causes no end of headaches and paperwork. A single payer system could reduce costs through having us deal with a single entity. But Medicare is also subject to the whims of politics, as when earlier this year, Medicare held onto all physician payments while Congress and the President negotiated a new Medicare fee structure. This had a real world impact of making it hard to pay our bills.

But this isn't about the advantages and disadvantages of a single payer system---neither candidate is proposing such a thing. This is about the disaster the McCain plan would wreak on all of us.

Let's start with the most insidious proposal---to eliminate state borders with regard to regulation. This idea is both consistent and inconsistent with conservative values. It tramples states' rights, but it also does away with regulations. What kind of regulations? In my last post, we talked about the problem of diabetic testing supplies, and a reader pointed out that California law mandates coverage. Under McCain's plan, insurance companies would simply pack up and move to Nevada (or wherever) and be free of pesky life-saving regulations. Sure, this could reduce costs, but how often have we seen these savings passed on to consumers? Plans can become as restrictive as they wish by simply finding a state of refuge.

Moving on to the big part of the proposal, we'll take an example from my family and my small business. Coverage for my family costs about 12,000 USD yearly. That cost is subsidized and untaxed, making it reasonably affordable for me (I'm paying out of pocket about $1200/year for my coverage). Coverage for the employees of my practice changes yearly because of the costs of the various plans offered. Some years we have a great plan, some years we have a high-deductible plan.

Anyway, under McCain's plan, our employees benefits will be taxed. That will reduce their income. However, they will get a tax credit. This credit will be worth $2500 for most of them. With this credit, they will be able to purchase only a crappy, high-deductible plan. Why? First of all, we probably won't provide coverage anymore because it will save our narrow-margin business quite a bit. Second, my employees will no longer belong to a larger risk pool, and will be at the mercy of unregulated insurance companies who can make all but the most basic coverage unaffordable.

Insurance is about pooled risk---that's what makes it work. On the other hand, if, as an insurance company, you can get away with only insuring low-risk people, your profit will go up. McCain's plan eliminates state coverage mandates, risk pooling, and the incentive for employers to provide coverage, which is usually better than individual coverage.

McCain's plan will destroy health insurance as we know it, will save no money, and will increase the dis-incentive to seek preventative and other early care.

One thing was clear in this week's debate: Obama and McCain, independent of their health care plans, have a basic philosophical difference. Obama sees health care as a right, McCain does not. I know many people who share McCain's view, but I do not. A healthy society (in all senses of the word) requires universal coverage, large risk pools, and a dose of humanity. Any good health plan will encourage the largest possible risk pool (the entire population), will cover the most important basic health needs, and will take into account quality and cost. It will have to balance the benefits of an open market vs. bureaucratic control. It's a tough problem. But it's one we can't ignore, and McCain's plan isn't a solution, but a guaranteed way to exacerbate all of the faults of our current system.

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Stick to medicine, you clearly do not understand the economic principles behind McCain's plan.

"Obama sees health care as a right, McCain does not. I know many people who share McCain's view, but I do not."

If you share Obama's vision, how about you start giving your services away for free. In fact, why don't we dictate that all doctors provide their services for free. It would result in universal coverage.

Actually, it would not. You probably understand the economic reasons why it would not. Unfortuantely, you probably only understand the economic realities when it negatively affects your bottom line.

Well, McCain's plan is much better at taking into account economic realities than Obama's plan to improve and expand coverage for all. If you weren't so selfish, you would understand why.

Stick to medicine, you clearly do not understand the economic principles behind McCain's plan.

I don't understand them either. Would you explain, please?

I have heard people make well-reasoned arguments in favor of McCain's plan. Aaron is not one of those people.

Mooron Durst: "Stick to medicine, you clearly do not understand the economic principles behind McCain's plan. "

Right. Leave srs bzness to serious people. Like we've left the economy to the serious people in Wall Street. That worked out so well.

I always thought untaxed compensation was one of the most unfair provisions of the tax code. Why should more well to do people, who tend receive benefits from work,not pay taxes on all of their compensation when less well to do people, who tend to not receive benefits, are forced to pay taxes on all of their compensation?

I always thought untaxed compensation was one of the most unfair provisions of the tax code. Why should more well to do people, who tend receive benefits from work,not pay taxes on all of their compensation when less well to do people, who tend to not receive benefits, are forced to pay taxes on all of their compensation?

How ignorant, Mr Durst, can one be? Has it really never occurred to you that of all halfway rich countries the only ones where not everyone automatically has health insurance are the USA and South Africa? Don't you know that the USA pays a lot more for healthcare than, say, Europe or Canada or Australia or NZ or Japan, but gets less for it?

Ignorance seems to be the only reason why anyone would vote for McPain/Failin'. Go ahead, Mr Durst -- prove me wrong.

By David Marjanović (not verified) on 25 Oct 2008 #permalink

Mr Durst clearly doesn't understand economics, otherwise he would not have suggested that MDs give away their services.
If that is done people cannot assess the value of those services anymore which will result in more demand for services then there is. This will in turn result in an overall degradation of services provided.
Else said giving away services will result in them getting worse not better.

There are a few exceptions most notably vaccination (to achieve herd immunity) and preventative care where it is cheaper to have the entire population checked up then having to cope with the actual full blown problem (Tuberculosis is a good example here).

By Who Cares (not verified) on 26 Oct 2008 #permalink