Health care plans

There was a lot of information thrown around last night during the VP debate on the campaigns' competing health care plans.

Here are some of the comments and my best read on what the facts are. If you don't have time for all of this, skip to my next-to-last paragraph. And take an aspirin.

John McCain's plan

Senator Biden, responding to a question about subprime mortgage lenders, spoke of Senator McCain's support of deregulation and said, "As a matter of fact, John recently wrote an article in a major magazine saying that he wants to do for the health care industry deregulate it and let the free market move like he did for the banking industry."

FactCheck.org says this "relies on a single phrase from a journal article under McCain's byline, in which he said he would reduce regulation of health insurance "as we have done over the last decade in banking." But the full context reveals that McCain was referring narrowly to his proposal to allow people to purchase health insurance across state lines." The full article from the Sept/Oct issue of "Contingencies" with John McCain's byline is here. I encourage you to read it to get a better sense of Senator McCain's thoughts on health care and insurance.

Meanwhile, Governor Palin and Senator Biden strongly disagreed on what Senator McCain's health care policy would cost taxpayers. Governor Palin said Senator McCain is "proposing a $5,000 tax credit for families so that they can get out there and they can purchase their own health care coverage. That's a smart thing to do. That's budget neutral. That doesn't cost the government anything."

In response, Senator Biden said,

Do you know how John McCain pays for his $5,000 tax credit you're going to get, a family will get?

He taxes as income every one of you out there, every one of you listening who has a health care plan through your employer. That's how he raises $3.6 trillion, on your -- taxing your health care benefit to give you a $5,000 plan, which his Web site points out will go straight to the insurance company.

And then you're going to have to replace a $12,000 -- that's the average cost of the plan you get through your employer -- it costs $12,000. You're going to have to pay -- replace a $12,000 plan, because 20 million of you are going to be dropped. Twenty million of you will be dropped.

So you're going to have to place -- replace a $12,000 plan with a $5,000 check you just give to the insurance company. I call that the "Ultimate Bridge to Nowhere."

FactCheck doesn't review Senator Biden's explanation of Senator McCain's plans, but it does refute the notion that the plan is "budget neutral. FactCheck says, "The Urban-Brookings Tax Policy Center estimates that McCain's plan, which at its peak would cover 5 million of the uninsured, would increase the deficit by $1.3 trillion over 10 years. Obama's plan, which would cover 34 million of the uninsured, would cost $1.6 trillion over that time period.

And, "The nonpartisan U.S. Budget Watch's fiscal voter guide estimates that McCain's tax credit would increase the deficit by somewhere between $288 billion to $364 billion by the year 2013, and that making employer health benefits taxable would bring in between $201 billion to $274 billion in revenue. That nets out to a shortfall of somewhere between $14 billion to $163 billion – for that year alone."

The Washington Post gives its analysis of Senator Biden's comments, giving it a "Two Pinocchio rating" of significant omissions or exaggerations. The studies they cite suggest that Senator McCain's plan will help more people get health insurance over the long run. "The Urban Institute and the Brookings Institution estimated that 5 million people would gain coverage under the McCain plan after four years, after which the pendulum would swing in the opposite direction. Health Affairs calculated that the number of uninsured would increase by 5 million after five years."

However, an article in the Wall Street Journal doesn't agree, saying, "Sen. John McCain's proposed health care plan is likely to result in higher overall health care spending than Sen. Barack Obama's, says Kenneth E. Thorpe, PhD, Emory University health policy researcher," and that, "Under McCain's plan, 14 million adults would face either denials of coverage or pre-existing condition waivers in today's individual health insurance market. If all employers dropped coverage, over 65 million adults would face the same fate, Thorpe's analysis notes."

The WSJ also supports Senator Biden's contention about how Senator McCain's plan would change what taxable income would look like: "The central tenet of McCain's health care plan is to withdraw the current tax exclusion of employer health insurance contributions and treat them as taxable income. In exchange, McCain would provide refundable tax credits of $2,500 for individuals and $5,000 for families to offset the cost of purchasing insurance in the non-group private market." However, according to the Washington Times, "For most families, that tax credit would for several years be more generous than the current tax break for employer-sponsored health insurance. An analysis of McCain's plan by the Tax Policy Center estimated that McCain's plan would increase the federal deficit by $1.3 trillion over 10 years, mainly because it would lead to less tax revenue coming in."

In short, Senator Biden's comments were off the mark in terms of immediate out-of-pocket expenses, and may be off the mark in terms of whether or not more people will be insured, but Senator McCain's plans may be unworkable in light of our current financial crisis and tax needs.

Barack Obama's plan

Finally, Governor Palin spoke of "Barack Obama's plan to mandate health care coverage and have universal government run program and unless you're pleased with the way the federal government has been running anything lately, I don't think that it's going to be real pleasing for Americans to consider health care being taken over by the feds."

An Associate Press report says that this is "Wrong on several counts. Obama's plan does not provide for universal coverage, only mandates insurance for children and doesn't turn the system over to the government. Most people would still get private insurance through their work. Obama proposes that the government subsidize the cost of health coverage for millions who have trouble affording it and he'd set up an exchange to negotiate prices and benefits with private insurers — with one option being a government-run plan."

Critiquing both plans

Finally, according to an article from the Kaiser Family Foundation, neither candidates' plan is workable as it is currently proposed. "Health insurance consultant Bob Laszewski said, "The chance for major health care reform in either 2009 or 2010 is now zero." He added, "Obama's health plan will cost at least $100 billion a year. That's now a nonstarter. McCain's health plan counts on deregulation of the health insurance industry. Do I even need to explain to you why that is a political nonstarter in this environment?"

So there you go. My non-factual 2 cents is vote for either of the candidates for some reason other than their health care plan.