20 Million: Give or Take?

by Eric Martin

Like Paul Krugman who has been beating this drum for some time, I firmly believe that Obama should make accessible health insurance the centerpiece of his domestic platform.  Loud and clear.  The contrasts between the Obama plan and the McCain plan could not be more stark.  Kevin Drum is right on the money riffing off a Bob Herbert column:

A study coming out Tuesday from scholars at Columbia, Harvard, Purdue and Michigan projects that 20 million Americans who have employment-based health insurance would lose it under the McCain plan.

....According to the study: “The McCain plan will force millions of Americans into the weakest segment of the private insurance system — the nongroup market — where cost-sharing is high, covered services are limited and people will lose access to benefits they have now.”

The net effect of the plan, the study said, “almost certainly will be to increase family costs for medical care.”

Remember: this is a feature, not a bug. Republicans think Americans use too much healthcare, and they figure that the best way to fix this is to make it more expensive. So that's what McCain's plan does. It's a pretty typical specimen of the "more skin in the game" plan beloved of conservative think tanks.

McCain's plan removes the tax exemption currently enjoyed by employees receiving employer-provided health insurance.  So if your employer provides you and your family with health insurance at a cost of, say, $10,000 a year, under McCain, you will have to pay taxes on that $10,000 "income."  McCain seeks to offset this tax increase with a tax credit, but the credit is too small and it's not indexed, so each year the credit will buy less and less health care on the open market.  Further, by design, it will create a death spiral spelling an end to widely available employer-provided health insurance.  From Herbert:

When younger, healthier workers start seeing additional taxes taken out of their paychecks, some (perhaps many) will opt out of the employer-based plans — either to buy cheaper insurance on their own or to go without coverage.

That will leave employers with a pool of older, less healthy workers to cover. That coverage will necessarily be more expensive, which will encourage more and more employers to give up on the idea of providing coverage at all.

The upshot is that many more Americans — millions more — will find themselves on their own in the bewildering and often treacherous health insurance marketplace.

That would be a marketplace whose insurance providers, quite logically, dedicate tremendous amounts of resources to winnowing out high risk applicants and denying benefits to already enrolled customers who get sick (private insurers are for-profit organizations after all, and paying for health care is a loss taken out of the bottom line).  So the older, less healthy workers will be left to the mercy of insureres whose primary mission is to avoid providing them with insurance (unless they can charge such exorbitant rates that the rather sizable risk of paying out large sums to this class of customers is covered).  Ezra Klein, as one would expect, provides more information.  Klein on the upshot:

But this is the main fact worth knowing, and repeating, about John McCain's health care plan: Its first-order effect would be to take employer health insurance away from 20 million Americans who currently have it. And this estimate is on the low-end.   [bold added]

Just what America needs.  More than 20 million Americans losing health care coverage at a time when 45 million are already without.  On the other hand, non-partisan groups estimate that Obama's health care plan will leave fewer than 20 million Americans without health insurance.  In other words, Obama's plan would cover the entire country, less 15-20 million (and even then, that 15-20 million will have access to coverage under the Obama plan, even if they opt not to obtain it). 

Put bluntly, the respective health care plans will make the difference in health care coverage for 50 million Americans.  That's 1/6 of the entire population.  Men and women who have worked their entire lives to contribute to the greatness of this country only to be left without health care during the years that they need it most.  Millions of children, left more vulnerable by a Republican Party that for some perverse reason is able to claim the mantle of family values.

[UPDATE: Matt Y's got some useful links as well (assuming he fixes the last one).]

Comments

[LFC]

"If they'd rather die, they had better do it and decrease the surplus population. Good night, gentlemen. "

-- Ebenezer McCain

[Whammer]

Well, that so-called "study" was done by "scholars", so we know that it was merely an elitist perspective.

[Elyas]

Democrats could easily make health care the central focus of the election (which would give Obama the upper hand) if they would just push through a vote on SCHIP. They're backing down to Bush's veto threat when they should be forcing McCain into a tough spot (and putting Bush back in the headlines).

[John Thullen]

Let's not forget moral hazard.

If 50 million people suddenly get health insurance at less than exorbitant cost, they might wink at each other and simultaneuosly come down with metastasizing colon cancer, the better to freeload radical chemotherapy and radiation treatments.

At least we'll know them by their bald heads, so we can feel ideologically superior.

My tumors shrink at the mere thought of losing health insurance.

Don't yours?

[tomeck]

"Obama should make accessible health insurance the centerpiece of his domestic platform. Loud and clear."

The public has consistently resisted Democrats who make health care a major issue. In order to succeed with this, Obama will have to do a Harry and Louise (or a Thelma and Louise) ad. Get some "real people" talking on the tube and just keep hammering away at "20 million losing their health care benefits. That's the kind of change McCain wants."

[Carleton Wu]

I can only think of two reasons that Obama would be holding back on this. Well, three, but the third probably isn't good enough:
1)He's trying to keep it simple- push a few messages hard, rather than getting too spread out for the low info voters to track. Some good messages may stay unpushed.
2)He's keeping his powder dry and will begin banging on this during/after the debates, when he's had a chance to go back-and-forth with McCain on the issue.
3)He's not going there bc the issue is too complex or too easily muddied by equivalence-drawing talking heads and RNC bullcrap. If the message is muddled, people may only receive simple lies such as "you wont be able to choose your own doctor".

Gee, now that I said the third one, it looks better. Well, worse, but more true.

[Incertus]

I can't imagine that insurance companies actually want this to happen. They have to know what the backlash against 20 million people suddenly losing their health insurance would be--potentially a national health care system like France's. Don't get me wrong--I'd love to have that, even though I'd rather not kick the millions who have insurance off of it to make it happen--but I suspect a great number of current Congresspeople would lose their jobs if McCain got his plan through.

[Eric Martin]

Then again Incertus, they sometimes dont' know what's good for them. Take, ie, the major investment banks.

Also, the food growers. They lobbied the Bush administration so successfully (I know, it was real hard for them to do that) to reduce the record keeping regulations, that they got hammered this summer by the contaminated tomato/other produce scares.

They figured out that they lost more money by their inability to trace the source/cause due to the lack of records than they would have spent just keeping the records required of them before their lobbying efforts.

Meaning: even big biz is shortsighted and greedy.

[liberal japonicus]

I dunno, Incertus. If 20 million people decided to jump from their employee based health care and went cherry picking in the market, and the market could then choose the healthiest, (or pick a lot of them up and then, through a combination of fine print and various requirements, limit the amount of payouts that an employee based plan could demand) that would represent a lot of profit opportunities for the industry. And if people felt they were getting more money for this 'choice', it would be spun as a victory for the market place.

[Incertus]

Thing is that you won't have 20 million people jumping from their employee-based health care. You'll get a lot of them thrown into the market because the employer decides it isn't worth it anymore, and a fair number of those people will be people who can't get insured, no matter what premiums they're willing to pay. And there will be a lot of people who won't want to go on the market because, let's face it, it's a pain in the ass to shop for individual health insurance, a lot more of a pain that signing up through your employer's group plan anyway.

The insurance industry would probably make gobs of money up front, but they'd be fighting the backlash soon enough, and it might end up costing them their business model. I know there's a lot of emphasis on the immediate profit, but this really would be a case of killing the golden goose.

[fostert]

Sadly, I don't think 20 million angry people is enough to force any reform in the health care system. As someone who can't get insurance, I was hoping McCain's plan would cause more backlash. My guess is it was designed to cause as much pain as possible, but not enough for everyone to demand real change.

[Gary Farber]

"In order to succeed with this, Obama will have to do a Harry and Louise (or a Thelma and Louise) ad."

It seems to me that the notion that a tv ad, or any set of them, will make a big difference in this election is fighting the last war. This is 2008; the citizenry is wildly fragmented in how they take in information; even on tv, most people have cable, and loads of have hundreds of channels, and most don't sit around obsessively watching cable news. What makes anyone think a tv ad in today's environment would be make-or-break?

[MeDrewNotYou]

This is 2008; the citizenry is wildly fragmented in how they take in information

I think the best way to push the issue of healthcare (and other issues that have a personal effect) is for Obama supporters to just talk to everyone they know. Just casually talking about it with friends/family probably has more of an effect than any ad could. When I tell my dad what McCain's plan would mean for him, he knows that I'm being honest and trying to help him make the decision that's best for him, and by extension, others in his situation.

An ad, on the other hand, goes right over dad's head. To him, politicians never do what they promise, and you can't trust their ads, they're just trying to get elected.

The personal touch makes all the difference, since I'm someone who wants what's best for my dad while a politician just wants to get elected. (Yeah, the old man's a pretty cynical guy.)

(This isn't to say that an ad would be a bad idea, it could be useful to kickoff some conversations and put some facts out to back up the claims.)

[Carleton Wu]

Then again Incertus, they sometimes dont' know what's good for them. Take, ie, the major investment banks.

But these decisions may have been good for the people making them (upper management) even while they were not good for the people whose interests were supposed to be safeguarded (the investors). Likewise, higher short-term profits may be the best case for insurance CEOs, regardless of the impact on the medium and long term for the investors.

[Lindsay K]

I've known since 2002 that McCain was an awful presidential candidate and a McCain administration would be a waking nightmare, but this? This issue gave me the first real moment of deep, crotch-narrowing horror I've had this election cycle. Part of the reason people in this country don't revolt more against Bush's stupid policies is that they're mostly too distant from people's everyday lives, or else complex enough that their bad features aren't obvious or immediate. People may know there's a housing market problem, but it's hard to understand why or how to fix it in a sound byte.

Anyone who has had to deal with health insurance (which is virtually everyone except John "how many houses do I have again?" McCain and his ilk) knows that buying independently blows goats, and employer-subsidized is the way to go. Someone who has it will NOT want to lose it; I am terrified of losing mine, and I don't have to worry about little Susie and Timmy losing their coverage when I do. The visceral, personal involvement most people have in this issue is the reason I agree that this is something Obama should hammer. I mean, SCHIP was a great hammer-on (Bush wants kids to have no health care!) but this is even better because the ambivalent middle classes can't write it off as somebody else's problem. It's deeply personal for them: McCain wants to take away your insurance. It's like he's announced that he wants to come over to your house at breakfast and take a poop in your cereal bowl.

ANY issue can be confused; that's what Republicans do, because the only way they can win on issues is to obfuscate their clearly demented plotting to the point where people become confused and decide that Republicans are in favor of "smaller government" or some shit. To me, the fact that no one is really talking about McCain's health plan would seem to indicate that McCain and his friendly pocket media would prefer we DON'T talk about it. So talk about it!

[NonyNony]

I can't imagine that insurance companies actually want this to happen. They have to know what the backlash against 20 million people suddenly losing their health insurance would be--potentially a national health care system like France's.

A national health care system like France's would be outstandingly great for health insurance companies long term. The government would take on the biggest risks and heftiest payouts, while the insurance companies could continue to make money at the edges by providing extended coverage for things that the universal coverage doesn't provide for. That leaves insurance companies back where they're most comfortable - taking money from a lot of people for things that they have a very small likelihood of ever having to pay out for. (There's nothing wrong with this model, by the way - it's how insurance is SUPPOSED to function. Which is actually why healthcare shouldn't be run on an insurance model in the first place.)

Now, the disaster that the McCain plan would unleash on the insurance market would probably kill a number of companies off. For starters, how many of those young healthy workers are really going to use their tax credit to buy insurance when they can just keep the money in the first place? Only the ones who have a strong suspicion that they're going to need it - those who have risky hobbies, those that are married and may be dealing with a pregnancy and a kid in the near future, and women (not as a sexist thing but because women expect to see a doctor at least once a year, while men under the age of 35 don't). The young healthy men who pay into the system but never see a doctor just won't be there - reducing the risk pool and damaging the insurance-based healthcare model even more than it already is.

So I suspect that even the assumption that the big insurance companies would make money off of this is wrong - it's seems equally likely that they would lose out big time as employers drop insurance and the pool of workers that net them the most money don't bother to buy policies. They end up having to cover just the folks who are actually going to use their policies. This really looks like a plan where nobody wins at all.

[MeDrewNotYou]

Lindsay K-It's like he's announced that he wants to come over to your house at breakfast and take a poop in your cereal bowl.

Thanks, you just ruined cereal for me. ^.^

Seriously, though, I agree its an issue that we need to push, but I think it would best be done on an individual basis.

If Obama pushes it himself, I think we'd hear all about how socialized medicine means we can't see our doctor, long waits, the standard BS. Yeah, he can refute that, but it takes time that he could be using to force Republicans to own up to the messes they've made.

Certainly Obama should talk about health care, but I think its our responsibility to push this issue for the reasons I mentioned http://obsidianwings.blogs.com/obsidian_wings/2008/09/20-million-give.html#comment-130921726>here. This is something that grassrootsy action will be really effective with. Just have Obama and Biden say enough to give us the necessary info/ammo, and we do the rest.

I'd like for us to be really careful with the health care issue because its so vital. Taking the chance of letting the Republicans poison it and make it much harder to accomplish politically is, IMO, too big a risk.

[John Thullen]

I'm for eliminating taxes on hard-working tumors and shifting the cost of reaming out clogged arteries to the arteries themselves as a way of incentivizing better, cheaper healthcare.

Incentivizing people is not the way to go. Go locally, to the body parts themselves, which are closer to the problem.

You didn't see John McCain resorting to government-subsidized healthcare to remove facial melanomas, did you?

You did?

Well, you must be seeing things.

[tomeck]

What makes anyone think a tv ad in today's environment would be make-or-break?

It's not just the ad. It's making the ad obnoxious enough that it gets into the news cycle and on the blogs and everywhere else. Republicans have gotten far more impact off the buzz about their ads than they've gotten for the ads themselve. Wasn't Swiftboat run only in a few markets, but the reaction was all over the place.

[hairshirthedonist]

Oh, Canada... I'm considering Vanouver. It's always at the top of those quality-of-life lists for cities around the world, and it doesn't get too cold. I know it's pricey, but I don't need much. I'll let you guys know in January. McCain/Palin may really represent change - in my country of residence and citizenship.

(I hope I don't come off too much like a random spammer, but this is all getting to be too depressing.)

[Gary Farber]

Vancouver was quite lovely, last I looked, though to be sure, that was a bit less than 30 years ago. But, then, Seattle and Portland were very nice, too.

[Ara]

What makes you all think that evidence helps persuade people?

I don't know why I should be terrified by this. And I don't know why I shouldn't look at this and begin to think that reasoning is a terrible way of getting things done.

How (and why) are you supposed to use reasons to persuade people when sound reasoning has just the opposite of the intended effect?

[MeDrewNotYou]

Ara- That study does scare the hell out of me. But my thinking is that when coming from someone you know and trust (hence family/friends), people will actually listen. Coming from an 'expert' you don't know their true intentions. Coming from your son, parent, friend, you know that the person has your best interests at heart (ideally, but I think you see what I mean).

The study did remind me of something the professor said on the first day of Philosophy of Religion last semester. To paraphrase, "Our goal should be to hold as many true beliefs as possible while holding as few false beliefs as possible. When evidence is discovered that shows a belief to be false, we have a duty to reject that belief and adopt a better one." That so many people are apparently unwilling to think says a lot about either American's nature, or even worse, human nature.

[Ara]

Well, what's doubly terrifying is not that evidence has *no effect* (which would be bad enough), but that it has the opposite effect of strengthening the false belief, and that the magnitude of the effect is incredibly strong.

It just makes me think: our deliberative mechanisms are great ways of figuring out what we ought to do, but they are self-defeating for the purpose of persuading others.

[Michael Cain]

Meaning: even in particular big biz is shortsighted and greedy.

Fixed that for you. I know, ObWi considers it poor form to imply I can read Eric's mind. Nevertheless, if your greed is on the order of, say, $100M, then short term manipulation of a large corporation is the best path to the goal in contemporary America. Although one might argue about the shortsighted part; if I can walk away with my $100M, and no one charges me with failing my fiduciary duties, I have clearly taken a sufficiently long view.

[John Thullen]

Hey, McCain invented the Blackberry.

And, Republicans in Michigan are trying to use home foreclosure data to disenfranchise voters, saying their home addresses are invalid.

This should boost McCain's poll numbers further, because as a wheelchair-bound Vietnam War veteran interviewed by the New Yorker at the Republican convention points out, "Obama is not an African-American, he's an Arab-American."

I think the rule about kicking cripples in the nuts should be suspended, like habeus corpus.

[xanax]

Slippery slope, Mr. Thullen. Begs definition of "cripples."

[jesurgislac]

If a foreign enemy attempted to impose the McCain health care plan on America we would consider it an act of war.

But hey. McCain is pro-life! He'd tell you as fast as any one that he's for saving the cute li'l fetuses by forcing pregnant women to have babies they don't want.

He's just against the idea that the cute li'l fetuses should have healthcare.

Cute as they are, they've got to learn to be independent and pay their own way.

Or marry a rich fetus, just like McCain did.