What's Wrong with the World Wednesdays presents...After leaving the health care topic in the dust for a few weeks, I'm sure you all thought I'd come to my senses and had put the whole thing to bed. You'd be wrong. How Obama and McCain approach healthcare are similar to how they will approach most of their other policies, so it is worth reviewing.
The short answer to the question is neither. However, I implore my readers to understand the severe limitations in choice that we have, so let's get started.
Barack Obama's Plan Highlights: try to contain your enthusiasm for Obama's glorious exercise in expansion of government power, regulation, spending, and inefficiency. His plan is like the Rolls Royce of collectivism and utilitarianism. Wait, Rolls' wouldn't exist in a classless society, scratch that. You get what I'm saying. I think the Senator is suffering from delirium or a gross lack of economic education, maybe both.
1. Heading towards Universal Coverage. Obama says in a New Yorker article, "...a single-payer system—a government-managed system like Canada’s...would probably make sense." Probably? First of all, no. Second of all, health care reform is not a game of wait and see, in particular when we have plenty of examples of failing universal healthcare worldwide. Obama has sidelined the single-payer idea for now due to dramatic costs to overhaul, but he is adamant this is where he'd like to go. For now, he will mandate coverage for children up to age 25 (unconstitutional since the age of majority is 18). I'm curious how all those low-income mothers with 5 or 6 kids are going to manage.
2. Cost-cutting is a (fallacious) priority. There is no such thing when you increase regulations and coverage requirements. Do not be fooled: some entity will pay those costs. There is no low-cost brain surgery, or discounted MRI. Although I've heard he got Isaac Mizrahi for Target to design some new hospital gowns and chic bedpans for less. So, how do you cut costs on healthcare? Subsidies (paid for by your taxes), price ceilings, and Healthcare Corps (a creepy new idea of Obama's where volunteers get some kind of compensation via the tax code, in other words: more government employees.)
3. Barack doesn't believe in freedom to choose. He is strongly opposed to individuals creating and directing personal Health Savings Accounts. He says that they lead to people purchasing more health care than they need and that the "freedom to choose" leads to "magnified risks and rewards." If you like where that came from, you can devour additional tidbits of
incoherence in The Audacity of Hope. I think what Obama means is that when people are free to choose for themselves, they sometimes make bad choices, but that is not a reason for taking away the right to choose from everyone. Furthermore, for the record, the third-party payer system (where employers provide the benefit) is what magnifies costs and reduces transparency, increasing the likelihood to spend more than needed. Obama plans to dramatically increase employer involvement and requiremens.My Conclusion: Obama better be the Messiah, because his plan is going to require a number of miracles to work.
John McCain's Plan Highlights: a serious attempt at reform. It is not the ultimate solution, but it is a move in the right direction.
1. Enter deregulation and free market competition. I can already anticipate those who are going to make some clever-yet-veiled-in-disgust comments about the free market and its failures. First, you are wrong; I don't have time to debate this concept - you either accept it or you don't. Second, McCain is keen on subsidies and quasi-regulation too, but just less than Obama. Moving on...when left alone the free market works to allow goods and services to find their normal price levels and direct resources to their most highly valued use. That means most artificially high costs would be reduced, although some may indeed rise if they were kept artificially low, but that is what healthcare coverage is meant to mitigate. You have to understand that a doctor's time, training, medical technicians, equipment, liability insurance, hospital operations all have a cost that cannot be lowered artificially. When you call a $1,000 MRI a $500 procedure, that's when you start paying $200 for a buccal swab.
2. Reduce the third-party payer system through a tax credit and increased consumer income. McCain proposes reducing the incentive for employers to provide healthcare - I know this sounds backwards, stay with me. Employers pay for their workers with a combination of wages and benefits, right? If part of your pay is in health care, and that requirement is taken away from employers, they will simply shift the proportion they would have spent on that care to your wages, thereby increasing your take-home pay which you can use to buy portable insurance. He proposes a $2,500 tax credit minimum to help offset the cost of insurance and the increase in taxes from your bump up in income. He even suggests a higher credit for those in poor health.
3. Buy insurance from any state! This is one of the best features of the plan. Healthcare is largely regulated at the state level. Those consumers who want a high-regulation environment could purchase from New Jersey, though they would have a much higher cost. Similarly, Kentucky has low-regulation, low-cost coverage. Today it would be illegal to cross state lines for coverage. Not only does this increase choice, but competition. If consumers could walk away from high cost states, those states would realize they are not going to get much market share and would need to reduce regulation (which would reduce costs without subsidies.)
My Conclusion: even though McCain's plan is peppered with questionable features I didn't cover here - it is less likely to dramatically burden taxpayers or degrade the quality of care. The freedom to choose is increased, and the most poor would still have access to care. It is the far better choice of the two.
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I'm curious to see what you are thinking...