Wednesday, April 30, 2008

McCain plays medicine man

John McCain's health care proposal is out and, as I predicted, it's not so much free market-oriented (as it's being touted in the press) as it is less statist than the schemes offered by his Democrat competitors, Hillary Clinton and Barack Obama.

That said, there are some good elements in the plan. For starters, he touts the value of Health Savings Accounts. Some years ago, I had an early version of the HSA (a real one that rolled over from year to year, not one of the accounts that magically ate your money every December). It really did give me a remarkable degree of control over my health expenses and an idea of what everything cost -- and it allowed me to go to providers as a cash-paying patient, with access to lower prices.

McCain also wants to shift tax breaks so that they stop incentivizing employers to offer health coverage and start incentivizing individuals to acquire coverage independent of employers. To that end he's offering credits of $2,500 for individuals and $5,000 for families. That's not enough to pay the full cost of coverage, but it's not supposed to be. It's just supposed to act as a carrot to get people to acquire coverage. McCain also wants to allow people to shop for plans across state lines, potentially buying cheaper insurance that covers just what they need from states with fewer regulations. Overall, that promises increased competition, coverage chosen for its personal fit, and also improved job mobility since people won't stay in unpleasant situations just to retain coverage.

Tort reform is also on McCain's agenda, though I'm curious as to how he's going to address what's really a state-level issue from the White House.

McCain's proposal does not address the problems inherent in a third-party-pays system of health coverage. I don't see how his ideas are going to rein-in the increasing costs that come with the all-you-can-eat model (nor do Obama and Clinton address this).

And the plan does nothing to challenge the entitlement mentality that has converted health care in the minds of too many people into a "right" that somebody else has to provide at any and all cost. As long as people insist that unknown others owe them endless fixes for their booboos, health care will remain a political football, with the advantage going to the politicians who promise the most free stuff (Who pays the bill? Who cares?).

McCain also promises what sounds like a pricey but vague state-federal fix for the problems of "higher-risk" patients who have trouble getting approved for coverage under the third-party-pays system.

And there's some inscrutable stuff in there, including an endorsement of "coordinated care."

We should pay a single bill for high-quality disease care which will make every single provider accountable and responsive to the patients' needs.

Talk about counter-intuitive. If I want a doctor's attention, I expect that I'll get it not from one pre-paid bill, but because I haven't yet signed a check to her.

My verdict: Less bad than what the Democrats offer, with some actual quasi-market-oriented improvements over the current system. The model also allows for continuing individual experimentation, unlike Clinton's plan to conscript the entire population into a government-designed system.

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