When I called McCain’s campaign to ask about how he and Palin were going to change “corruption and greed” on Wall Street, I was promised that a press release would be issued shortly. Since McCain doesn’t actually have an economic plan, I’ll have to talk about another McCain policy.
McCain’s Healthcare Plan could as well be called a “healthcare plot” in the sense that a plot is like a plan—but bad. He is offering a refundable $5000 tax credit in exchange for taxing health benefits. The end result is that on average, everything should work out about the way it does—except more people will have private insurance and fewer will have employer-sponsored insurance. But there’s a funny thing about averages.
Three economists went moose hunting. They stumbled across a majestic bull. The first economist shot, missing by ten feet to the left. The second economist shot, missing by ten feet to the right. The third economist shouted, “We nailed it!”
This is the problem with McCain’s plan. When you drop employer-sponsored healthcare, you end up with a bunch of people who, while able to spend as much on health insurance as others, are uninsurable because of chronic conditions. The whole point of insurance is cost spreading—but nobody wants to pay the costs of the chronically ill. The young and healthy make out pretty well. Five thousand dollars may be enough to insure them. The old and less healthy will be in terrible shape because their insurance—if it’s even available—will run much more than $5000. This plan transfers health societal health spending from those who need it to those who don’t.
Now, you might say, “Surely states could pass some sort of consumer protection laws to stop this from occurring.” And they can—except that McCain has thought of this one as well. He wants to “break down artificial boundaries” along state lines. In other words, he wants to allow health insurance companies to do the same thing credit card companies do in finding the state with the fewest consumer protection laws and market their product nationally from there. Not only does this reduce states abilities to protect their own citizens, this puts pressure to race to the bottom to attract the insurers.
Oh. And I should clarify that that $5000 credit is not going to you. It’s going to the health insurance company. This plan will reign in health spending by reigning in health.
