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The Caucus:

Journal Disputes McCain’s Health Care Claims

By Kevin Sack

Senator John McCain’s top domestic policy adviser, former Congressional Budget Office director Douglas J. Holtz-Eakin, recently said in a conference call with reporters that Mr. McCain’s health care proposal would “put 25 to 30 million individuals out of the ranks of the uninsured, into the ranks of the insured.” In an article released Tuesday, a panel of prominent health economists concludes that Mr. Holtz-Eakin’s projection is off by, well, 25 to 30 million.

The article, published in the journal Health Affairs, argues that “initially there would be no real change in the number of people covered as a result of the McCain plan.” After a short-term reduction of 1 million in the number of people without coverage, the number of uninsured would increase by 5 million after five years, the authors predict. There are currently 45 million people without insurance, or 15 percent of the population, according to the Census Bureau.

Mr. McCain’s plan is designed to create greater equity between the group and individual insurance markets. He would end the exclusion of employer-provided health benefits from federal income taxes, an advantage not enjoyed by those who buy insurance on their own, and replace it with health care tax credits of $2,500 per individual and $5,000 per family.

That, the McCain campaign asserts, would drive more people into the individual market, fomenting competition, reducing premiums and discouraging consumers from buying more coverage than they need or can afford. The economists wrote that many “people are likely to have far less generous policies than those they have today.”

The analysis was written by Thomas Buchmueller of the University of Michigan, Sherry A. Glied of Columbia, Anne Royalty of Indiana University-Purdue University of Indianapolis, and Katherine Swartz of Harvard.

Eliminating the tax exclusion, they wrote, “would greatly reduce the number of people who obtain health insurance through their employers.” They put that figure at 20 million, and calculated that it would be offset at first by the 21 million who would be able to afford individual coverage using Mr. McCain’s tax credits.

Within a few years, however, the trend would reverse, the study asserts. That is because, according to Mr. Holtz-Eakin, the McCain health care tax credits would be indexed to “regular inflation,” presumably the Consumer Price Index, which is typically lower than annual increases in health care costs. Unless costs can be substantially reined in, the credits would therefore enable fewer people to afford coverage each year, leading to an eventual rise in the number of uninsured.

Mr. Holtz-Eakin did not respond to a request for comment.

The estimates in Health Affairs are comparable to those made in July by the Urban Institute and Brookings Institution, which projected that 1 million people would gain coverage after one year under Mr. McCain’s plan, that almost 5 million people would gain coverage after four years, and that the number of uninsured would then creep upward.

By comparison, Senator Barack Obama’s plan, which would provide heavy government subsidies for insurance for low-income workers, would reduce the number of uninsured by 18 million in 2009 and by 34 million in 2018, according to the Urban Institute/Brookings Institution report. That would still leave Mr. Obama well shy of his goal of achieving universal coverage.

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In addition, today three professors explain Why Obama's Health Plan is Better.

A snippet (though it's well-worth reading the whole thing):

Given the current inefficiencies in our system, the impact of the Obama plan will be profound. Besides the $2,500 savings in medical costs for the typical family, according to our research annual business-sector costs will fall by about $140 billion. Our figures suggest that decreasing employer costs by this amount will result in the expansion of employer-provided health insurance to 10 million previously uninsured people.

We know these savings are attainable: other countries have them today. We spend 40% more than other countries such as Canada and Switzeraland on health care -- nearly $1 trillion -- but our health outcomes are no better.

The lower cost of benefits will allow employers to hire some 90,000 low-wage workers currently without jobs because they are currently priced out of the market. It also would pull one and a half million more workers out of low-wage low-benefit and into high-wage high-benefit jobs. Workers currently locked into jobs because they fear losing their health benefits would be able to move to entrepreneurial jobs, or simply work part time.

Edited by Startraveler

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I REALLY do NOT want my health benefits taxed. The man has a screw looose. Are you repubs ready for that?!!

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