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.