The Obama campaign has taken to calling John McCain’s health-care
plan “radical” and Barack Obama himself declared during Tuesday
night’s debate that it would “lead to the unraveling of the
employer-based health care system.” Conservatives should see this
as a welcome development that could be a turning point in the
debate over the future of American health care.
A New York Times/CBS poll taken last month
found that 85 percent of Americans believe that the health-care
system should undergo “fundamental changes” or be “completely
rebuilt,” compared with just 14 percent who said it required only
“minor changes.” The poll is one of many that have shown
overwhelming public dissatisfaction with the state of American
health care.
Traditionally, such sentiment has played into the hands of
liberals, because their calls for sweeping changes were often
countered by conservative defenses of the American system. As a
result, Americans have come to believe that liberals want to
change the system that they hate, while conservatives want to
preserve the system that they hate. Is it any wonder that
conservatives have been losing on
this issue?
But the Obama campaign’s assault on McCain’s proposal provides
conservatives a rare opportunity to alter this perception, and
explain how when it comes to health care, it’s actually
conservatives who are offering change, and liberals who are
offering more of the same failed policies (only on a much grander
scale).
THE CURRENT SYSTEM discriminates against those who seek to
purchase their own health insurance, because it only offers a tax
exemption for those who get insurance through their employers. As
a result, many self-employed Americans cannot afford health
insurance, even though their taxes help subsidize others. Those
who do have health insurance through their employers can only
choose from a limited number of plans determined by human
resources administrators. If they don’t like any of the plans
offered, they’re out of luck, but if they find a plan that they
like, they’ll have to give it up if they take a job with another
employer. In some cases, people will stay in jobs that they don’t
like, just because they’re afraid of losing their health
insurance.
McCain’s plan would make the system fairer by ending the tax
exemption for health-care purchased through one’s employer and
replacing it with tax credits of $2,500 for each individual and
$5,000 for every family, but Obama wants to maintain a tax code
that discriminates against self-employed Americans who seek their
own insurance.
Obama argues that the $5,000 tax credit wouldn’t be enough to pay
for a $12,000 per-family policy. But the current tax exemption
granted to employer-sponsored coverage doesn’t pay for the
entire cost of a policy, which is typically split
between the employer and the employee. Obama fails to acknowledge
that if employers didn’t have to pay for health care, then they’d
be able to offer higher salaries.
Under the McCain plan, individuals would be able to choose
whatever policies suit their needs without worrying about the
preferences of the human resources department, and they could
keep the policies as long as they wanted, even if they changed
jobs or became self-employed.
The flood of new customers would actually create a market for
individual health insurance, in which companies would compete to
drive down costs and improve quality.
IN TUESDAY’S DEBATE, Obama also attacked another aspect of
McCain’s plan, which would allow individuals to purchase
insurance across state lines. Obama defended the status quo
system in which highly regulated states drive up the cost of
health coverage by requiring insurance companies to provide
certain benefits. (Some of the benefits companies have been
forced to cover include in vitro fertilization, morbid obesity
treatment, and lockjaw disorders, according to the Council for
Affordable Health Insurance.) As a result of such regulations,
insurance costs twice as much in a high-regulation state like New
York as it does in neighboring Connecticut.
While in a free market nothing is stopping insurance companies
from offering a plan with generous benefits, under the current
system that Obama wants to preserve, somebody who merely desires
basic coverage is forced to either pay an exorbitant amount for
benefits that they don’t want, or go without insurance. It’s the
equivalent of saying individuals have to purchase a luxury car
with a leather interior, GPS navigation, a DVD player, and every
other possible add-on, or have no car at all.
Obama would not only maintain the current system of regulation,
but he would implement onerous regulations at the national level,
forcing insurers to cover anybody who applies for insurance,
regardless of risk factors or pre-existing conditions, and charge
them the same price as those who are healthy. But this is not a
bold new solution to the health care crisis. In fact, the idea
has already been tried in several states — such as Kentucky and
Maine — and it has proven disastrous. What happens in such cases
is that healthy people don’t purchase coverage, and so there ends
up being a mass exodus of insurers from the state because they
don’t want to get stuck with only the riskiest patients. As with
employer-based health coverage, this leads to less choice for
consumers, and higher prices.
It may take a long time to educate the American public about the
flaws of the heavily regulated, employer-based health care
system, and McCain is not be the best spokesman for his own
market-friendly proposal. But the mere fact that a conservative
health care plan is being attacked as “radical” is a good first
step, and certainly better than having the public see
conservatives as defenders of a system most people believe is
broken.
