More on McCain’s “Health Plan” and Why It Doesn’t Add Up

[courtesy of California Progress Report]

By Anthony Wright
Executive Director of Health Access California

There's a new May Day edition of the Health Wonk Review up at the Medical Humanities blog.

While they spotlight our post on McCain's health "plan," I want to recommend Jonathan Cohn at the New Republic for his analysis, as well as a discussion on Time.com's Curious Capitalist and Swampland, which has lots of links as well.

Basically, the nicest things I've heard about the McCain plan is it won't do any harm because it really isn't a fleshed out plan, and it doesn't have a chance in Congress. However, the majority think it's a radical shift--and not in a good way.

One debate started in Time.com's Swampland here, which quotes health policy expert Robert Blendon:

“McCain's--which has some of the features of a plan proposed by George Bush in 2007, which didn't go anywhere in Congress*--actually envisions an entirely new system in which individuals would shop for their own health care coverage, presumably getting a better deal thanks to vastly more competition in the marketplace. "He proposes a vision for the future that doesn't exist -- yet," Blendon says. "His argument is I'm going to change how this thing works. ... In some sense, he has the largest scale what you would call 'reform' of all the candidates."

“On the other hand, the assumption underlying the Obama and Clinton plans is the opposite, says Blendon, that "the worst thing that can happen to people is to be by themselves trying to negotiate for insurance. ... The solution is protecting people from being out there by themselves" by pooling them together, either through the workplace or in newly created purchasing cooperatives.”

A commentator agrees, and succinctly lays out the three main reasons why not to shift people to the individual market:

1. Individuals have less bargaining power and sophistication than employers.
2. Negative selection.
3. Greater frictional costs from advertising to individuals, etc.