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.
Pretty good, although they are linked. Because the individual has so little power against a big insurer, individuals usually get charged more expensive rates, and insurers profit more from the individual market. Since they lack purchasing power, they also can excluded on a case-by-case basis (as opposed to group coverage, where part of the deal is to take the entire group). And finally, the administrative and marketing costs are far more example when the company is managing and selling the plans one-at-a-time, as opposed to a group.
Individual buying coverage are simply not getting the same bang for their buck as those in the group market. Why Bush, McCain, and others would want to take coverage in that direction is beyond me.