The main problem with America's health care system isn't too difficult to determine. The problem is, health care is way too expensive. It's so expensive that many people can't afford it. It's so expensive that many people forego health care insurance. As an example, a friend of mine recently went to see a specialist to diagnose his back injury. That office visit cost $765. He then had two MRI's at a cost of $4500. The total cost was $5265 just for my friend to receive a diagnosis of his back injury (a fracture). No treatment of his injury was included for that price. This is just one tiny example of the insanely high costs associated with health care in this country. Here are some numbers about the high cost of health care from the non-partisan National Coalition On Health Care:
In 2007, total national health expenditures were expected to rise 6.9 percent — two times the rate of inflation. Total spending was $2.3 TRILLION in 2007, or $7600 per person. Total health care spending represented 16 percent of the gross domestic product (GDP). U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.2 TRILLION in 2016, or 20 percent of GDP. In 2007, employer health insurance premiums increased by 6.1 percent - two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,100. The annual premium for single coverage averaged over $4,400.2
Keep this in mind as we compare the health care plans of Democrat Barack Obama and Republican John McCain. I'd take it as a given that any health care plan that doesn't attempt to reign in these crazily high costs will ultimately collapse under it's own weight, and is therefore a bad plan for America.
The Obama and McCain health care plans are pretty much polar opposites. Obama's is centered around government control and McCain's is centered on free markets. Here's how the Cato Institute summarized the respective plans:
Senator Obama’s approach relies heavily on government mandates, regulations, and subsidies. He would mandate that employers provide health care coverage for their workers and that parents purchase health insurance for their children. He would significantly increase regulation of the insurance industry, establishing a standard minimum benefits package, and requiring insurers to accept all applicants regardless of their health. He would offer a variety of new and expanded subsidies to middle- and low-income Americans. [ Link to Obama's website for details on his health care plan]
In contrast, John McCain emphasizes consumer choice and greater competition in the health care industry. He would move away from our current employment-based insurance system by replacing the current tax exclusion for employer-provided insurance with a refundable tax credit for individuals. At the same time he would sharply deregulate the insurance industry to increase competition. [Link to McCain's website for details on his health care plan]
HEALTH CARE COST REDUCTION: Both Obama and McCain make a claim for cost control in their health care plans.
Obama promises to modernize the heath care system to save money. After reading from his website several of the methods he'll use (integrate care, monitor providers, preventive care, catastrophic illness subsidization, cost transparency, electronic technology), I'm unconvinced they will reduce the cost of health care at all. It's as if Obama thinks he can micromanage the entire private health care industry, which is definitely beyond his grasp. He also promises to subsidize those who cannot afford insurance and calls that cost control, when it isn't. Subsidization is just another word for taxation. That is cost redistribution, not cost reduction. When I look at Obama's plan from a cost control standpoint, I see many new government mandates and regulations on health care providers and insuerers, and those invariably increase costs, not lower them. Where Obama's health care plan CAN reduce costs is through government intervention in the marketplace, through directly mandated lower costs. The Obama plan proposes to limit the amount of profit insurance companies can make, requiring them to funnel 'excess' profits into lower patient premiums. 'Excess' profit remains undefined by Obama (has anyone else noticed that liberals are attempting to gradually outlaw business profits ? Creep, creep, creep). Obama also proposes to lower prescription drug prices by allowing drugs to be purchased at lower prices in Canada and overseas (look kids ! a market-based reform ! This one would probably work. Yippee !...but what about FDA approval on those foreign drugs ?), and he would also allow the government to 'negotiate' with drug companies.
John McCain's health care plan would provide greater competition between insurance companies by allowing those companies to compete for business nationwide, instead of on a state-by-state basis. Like Obama, McCain would allow re-importation of drugs, greater use of generic drugs, coordinated care, prevention measures, new medical infrastructure, transparency, and technology. McCain wants to make Medicare more efficient. He also wants to pass tort reform to stop lawsuits against doctors who follow clinical guidelines and follow safety protocols. The heart of McCain's health care reform, however, is direct refundable tax credits for health care. Individuals would receive a $2500 tax credit, families a $5000 tax credit, to offset the high costs of insurance. This helps offset the cost of insurance to Americans without involving the iron hand of government, which I love, but it doesn't lower the costs of health care. Also, if you remember how much health insurance costs on the average ($4400 individual, $12000 family of four), McCain's health care credits don't cover it all, they just make coverage cheaper.
In the end, neither Obama's nor McCain's plan will probably alleviate the massive costs of health care significantly, though each could have some cost reduction effects. My buddy's back problem would still cost a bundle just for a diagnosis. Obama's plan would go further toward insuring the uninsured, though it won't achieve nor mandate universal coverage. Obama recently said that illegal immigrants would not be covered under his plan. Illegals make up a significant portion of those 47 million uninsured in America. Obama's plan will cost the taxpayers a bundle, while McCain's plan will save the taxpayers a bundle (but offset by what spending cuts, Johnny ? We can't keep running deficits, and you also promised to balance the budget). I'd prefer to save taxpayers a bundle, so I like McCain's approach better than Obama's. Obama's approach would be a giant step toward socialized medicine, which is tanking in Canada and Europe. It results in rationed care and long waits for treatment, and ends with the government telling you what medical procedures you can and can't have. And if you think lobbying and influence peddling is bad now, wait until the government controls such a huge chunk of our economy as health care. It'll be corruption city. No thanks. Obama's plan would also be very burdensome for small businesses and even large businesses, whom Obama would penalize if they didn't provide health care insurance coverage for their employees. McCain's plan allows for business growth, especially small business growth, by transferring the ever increasing health care burden away from business. That is a very big deal economically. McCain's plan will provide a tangential economic stimulus that would result in rising wages, lower prices, or lower unemployment. Obama's provides an economic damper that would result in lower wages, higher prices, and higher unemployment.
Verdict: McCain's plan is far from perfect, and it won't solve the uninsured problem (though it'll reduce it), but Obama's Big Brother, Big Tax, Big Spend approach scares the bejesus out of an old rumrunner like myself. Them dad-burned revenooers. Git the buckshot, Cletus. There has to be a better way.
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