Why Obama's Health Plan Is Better

Bingo!

Why Obama's Health Plan Is Better:

My phone number is 925-708-0467...

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In the Wall Street Journal on September 16, 2008. Harvard Professor and Obama Health Care Advisor David M. Cutler and his coauthors show that John McCain's health-care reform plan burdens America's high-value businesses with extra taxes. In America today, high-value and high-wage jobs are also high-benefit jobs. John McCain taxes them. And when you tax something, you get fewer of them: fewer of the high-value jobs that take advantage of the skills of the American worker and produce high wages and salaries for workers and high profits for managers and business owners.

By contrast, Barack Obama's health-care reform plan lifts the health-care cost burden from the backs of America's high-value businesses in five ways: Learning how to eliminate the one-third of costs for services at best ineffective and at worst harmful. Rewarding doctors and hospitals for providing health rather than performing procedures. Pooling individuals and small firms to give them bargaining power vis-a-vis health insurers. Preventing illness through making it profitable to provide regular screenings and healthy lifestyle information, the most cost-effective medical services around. Covering more people and removing the hidden shifted costs of the uninsured by lowering premiums by $2,500 for the typical family, allowing millions previously priced out of the market to afford insurance.

The lower cost of benefits will allow employers to hire some 90,000 low-wage workers currently without jobs because they are currently priced out of the market. It also would pull an estimated one and a half million more workers out of low-wage low-benefit and into high-wage high-benefit jobs. And more workers currently locked into jobs because they fear losing their health benefits would be able to move to entrepreneurial jobs, or simply work part time.

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TALKING POINTS:

• John McCain taxes the high-value high-wage jobs that are also high-benefit jobs. When you tax something, you get fewer of them: fewer high-value jobs that take advantage of the skills of the American worker.

• Fewer high-value jobs means reduced wages and salaries for workers and reduced profits for managers and business owners.

• The big threat to growth in the next decade is not oil or food prices, but the rising cost of health care. Doubled premiums since 2000 makes employers choose between cutting benefits and hiring fewer workers.

• Sustained growth thus requires successful health-care reform. Barack Obama and John McCain propose to lead us in opposite directionsﾑand the Obama direction is far superior.

• Barack Obamaﾕs health-care reform plan will modernize our current system of employer- and government-provided health care, keeping what works well and making the investments now that will lead to a more efficient medical system.

• Barack Obama's health-care reform plan lifts the health-care cost burden from the backs of America's high-value businesses in five ways: learning, rewarding, pooling, preventing, and covering.

  • Learning how to eliminate the one-third of costs for services at best ineffective and at worst harmful.
  • Rewarding doctors and hospitals for providing health rather than performing procedures.
  • Pooling individuals and small firms to give them bargaining power vis-a-vis health insurers.
  • Preventing illness through making it profitable to provide regular screenings and healthy lifestyle information, the most cost-effective medical services around.
  • Covering more people and removing the hidden shifted costs of the uninsured by lowering premiums by $2,500 for the typical family, allowing millions previously priced out of the market to afford insurance.

• Bottom line:

  • $2500 per family annual premium savings.
  • 90,000 more jobs for low-wage workers currently priced out of the market.
  • 1.5 million more workers pulled out of low-wage low-benefit and into high-wage high-benefit jobs.
  • More workers currently locked into jobs because they fear losing their health benefits would be able to move to entrepreneurial jobs, or simply work part time.

• Plus

  • Tax credits for those still unable to afford private coverage
  • The option to buy in to the federal governmentﾕs benefits system
  • Provide all with access to a portable alternative at a price they can afford.

• Other countries have all these savings today.

• The McCain tax hike will lead employers to drop coverage for over 20 million Americans.

• What would happen to them? McCain will:

  • Give them a small tax credit covering a third of premium cost.
  • Tell them to navigate the individual insurance market on their own.
  • Those already sick are completely out of luck
  • Those who have not won a genetic lottery are completely out of luck

• The Obama plan expands individual options, the McCain plan reduces them.

• The McCain plan is a big tax increase on employers and workers. With the economy in recession, thatﾕs the last thing Americaﾕs businesses need.

• The McCain plan does nothing to bend the curve of rising health-care costs downward:

  • He does not fund investments in learning.
  • He does not reward doctors and hospitals for providing health rather than performing procedures.
  • He does not fund prevention
    • Eliminating state coverage requirements will slash preventive service availability.
    • High cost-sharing plans he envisions will similarly discourage preventive care.
    • McCain does nothing about the hidden costs of the uncoveredﾑexpensive ER visits--recurring conditions resulting from inadequate follow-up care.

Comments

[bakho]

Voters really need to visualize that if they don't get health care through their employer, they will have to navigate the insurance gauntlet. People won't be happy if they have to spend more time dealing with insurance companies. Medicare D proved that.

[Michael Roberts]

Nice. Now that's what I call public service.

[kharris]

This is a decent step toward getting the sound-bite right, though I question the analysis. Arguing that taxing high-benefit jobs means there will be fewer of them is a bit kooky. We got into this situation partly because government limits on wages induced employers to give benefits. Employers want to compensate highly valued employees, to keep them in their seats. It is a bit facetious to say that McCain would tax away a certain kind of job. He would tax the benefit, and employers will find a way to get around that offering other forms of compensation. I suspect, and I suspect that you and everybody who is touting this talking point suspect, that McCain is really trying to reduce support for employer-provided benefits. That sounds like a class-warfare statement, a kind of statement Democrats are unwilling to make. So instead, we get the kind of shift of focus from a real economic statement to a slick economicy statement that makes McCain's plan easier to criticize. A trick learned from the Bush bunch, no doubt.

[Alex Tolley]

Regarding the Obama plan.

1. Learning. The NIH already has a database of "best practices" and I believe Kaiser is compiling their own based on their patient base. So nothing new here, just implementation. However, here is the rub, physicians are very independent and do not have to make changes. Which leads me to point 2.

2. Rewarding. HMOs were supposed to do this, but gaming the system will still be rampant. Doctors and hospitals will refuse to treat patients who they deem "untreatable" as the costs cannot be recovered. This will lead to a "triaging" of patients, rejecting those who will incur unrecuperable costs. This will certainly be beneficial in shifting the treatments from "end of life" towards "beginning of life", but expect a voter backlash when hospitals refuse to put granny on life support.

I would also emphasize that universal health care would be highly liberating for small business and entrepreneurs, and allow older workers to leave their employers because currently they are captive to the employer's pooled risk health insurance.

[c.l. ball]

Overall, very good.

I'm skeptical that "learning" will produce dramatic cost-savings. It is worthwhile for its effects on improved health. And prevention might prevent having to pay more to treat more advanced disease, but prevention measures that are pharmaceutical-based or that require expensive testing will not necessarily bring costs down considerably. But again, screening to catch diseases is good because it would improve quality of life.

What is missing above is health-care portability. The problem now is that most persons health insurance is job linked; if you're laid off, you have no health ins. (at least no affordable ins. because COBRA costs are very high). McCain throws the baby out with the bathwater -- delinking ins. from jobs by forcing people onto a private market is no panacea unless that market is highly regulated, which is not what he wants). Being able to buy into FEHB programs *after* you're fired is no help -- few people would have the money to buy-in, even *assuming* the government is picking up 75% of the premium costs. There needs to be a way to compensate firms for continuing ex-employees coverage until they are re-employed.

[Ben C]

McCain seems to realize that drug prices are too high, so he will let people reimport them from Canada. But why are they lower in Canada in the first place? Because the Canadian government negotiates for lower prices, something that Barack Obama wants to do with medicare.

Why is John McCain okay with leaching off the Canadian government's negotiated prices but not okay with simply negotiating them ourselves?

[kharris]

Ben,

Because refusing to allow Medicare to push for lower drug prices was just one more way for the Bush administration to pull money out of the middle class through taxes (now and in the future) and funnel that money to corporations. When he said "it's your money" he was right, but not in the way he meant. Rather than using tax money to pay for government services, he has worked to turn tax money into private profit.

McCain knows that imports from Canada are a happy populist notion, but that it requires each and every drug user to go to the trouble of arranging the purchase, rather than just going to CVS and plopping down a Medicare card. A considerable margin is preserved for drug companies, while still "addressing high drug costs" in a way that the public understands.

[Robert Waldmann]

"if you tax something, you get fewer of them:" is clumsy as "something" is singular and "them" is plural. Consider "If you tax things you get less of them." "If your tax system penalizes firms which provide things you get less of them". Hell "if you impose higher taxes on good jobs you will have fewer of them"

Too little on what allowing interstate competition really means. How about
"The McCain plan will massively deregulate insurance companies by allowing them to dodge almost all existing regulations on what they must cover"

Would have to check that almost all such regulations are state level. I don't know how to. Examples on the web "Your insurance company wouldn't be required to pay for breast reconstructive therapy after a mastectomy ... or for a pap smear" (this is true

"For example, forty-seven states now require mental health parity, forty-nine states require coverage of breast cancer reconstructive surgery, and twenty-nine require coverage of cervical cancer screening."

Via Ezra Klein http://tinyurl.com/6dyehu

he also has a shorter list of the key points of your talking points for people who are impatient themselves or who are trying to convince others who are.

http://tinyurl.com/5bp35x