Big differences between them, and bigger impacts in California

Friday, October 10, 2008


* Under McCain Health Plan, Over 2.4 Million Californians Would Lose On-the-Job Health Benefits

* New reports reveal McCain’s plan that would strip away consumer protections, raise taxes, and leave many California families to fend for themselves at mercy of insurers
* New chart shows Obama’s framework similar to Nunez/Schwarzenegger proposal, with expansion of employer coverage, public programs, and insurer oversight

California, because of its specific demographics and policies, will be more acutely impacted by the health proposals of the two presidential candidates, according to new information released today by Health Access California, the statewide health care consumer advocacy coalition, and Health Care for America Now!, a national campaign to win quality, affordable health care for all Americans.

Risks of the McCain Plan: Health Access California and Health Care for America Now released two new reports from the Center for American Progress Action Fund and the Economic Policy Institute which find that 2.4 million Californians would lose employer-sponsored health insurance under the McCain health care plan. The reports conclude that McCain’s health care plan would accelerate the deterioration of employer-sponsored benefits by both removing current tax incentives and, at the same time, taxing employee benefits as if they were salary.

In California , Senator McCain’s plan would:
* Threaten the coverage of over 17 million people in California who receive health benefits through work. The Economic Policy Institute projects as many as 2.4 million could lose their job-based coverage. McCain’s plan eliminates the employer health care tax benefits that enable many businesses, especially small businesses, to provide group insurance to their employees.
* Put at special risk coverage for the 6.2 million non-elderly people in California strug­gling with diseases like cancer and diabetes who are now covered through their jobs. Under McCain’s plan, insurance companies would be free to “cherry pick” only those individuals for coverage who do not have costly health conditions and avoid state regula­tions that keep health care accessible and affordable.
* Raise taxes on the health insurance benefits paid by millions of California families. A typical California family could pay almost $1,300 more in taxes by 2013 if McCain imposes both income and payroll taxes on their health coverage.

At least one in 13 people would lose his/her employer-sponsored health insurance benefits and be forced out into the private insurance market where premiums are more expensive and coverage is less comprehensive. Anyone with a pre-existing condition – as defined by the insurers themselves – could be denied coverage altogether.

The chart and reports are available at the Health Access California website, at:

* Center for American Progress Action Fund: “John McCain’s Radical Health Care Agenda.”
* Economic Policy Institute: “Under McCain Health Plan 2,407,260 People in California Would Lose Employer-Sponsored Health Coverage.”
* Health Access California : “Health Reform Proposals: McCain, Obama, and Nunez/Schwarzenegger”

Comparison with California Proposals: Some of the provisions of the plans of the two presidential candidates, Senator Barack Obama and Senator John McCain, have been extensively discussed in California . As indicated by a chart prepared by Health Access California, Senator Obama’s plan follows a very similar framework as AB x1 1, a plan negotiated between Speaker Nunez and Governor Schwarzenegger, and the plan’s antecedents in the legislature.

The provisions of Senator McCain’s plan has gotten less state-level attention, except for one bill, SB x1 16 by state Senator Tom McClintock, to allow insurers to sell across state-lines, and thus avoid state oversight and consumer protections.

California Consumer Impacts: In each of the three ways that consumers get coverage, the McCain and Obama plans have radically different strategies, each on with significantly different results:

* On Employer-Based Coverage: Just around half of Californians (nearly 18 million) have employer-based coverage, but Californians are less likely to get job-based benefits than in the rest of the country.
· The McCain plan would tax health benefits offered by employers, and offer a tax credit instead for those on the, individual health projects. This would result in the 1.3 to 3.3 million Californians losing their health coverage through work, according to EPI.
· Given the lower expectation of on-the-job benefits in California , there is fear that the state is reaching a “tipping point” in some industries, where if more leading employers drop coverage due to different tax incentives, that would force all competitors to follow.
· The Obama plan would bolster on-the-job benefits by setting an as-yet-determined minimum requirement for employers to contribute to health care for their workers, and also provide financial assistance to small business, and new purchasing pool options for all employers.
* On Public Programs: Under a third of Californians–over 10 million–have public program coverage: over 6.6 million low-income children, parents, seniors and people with disabilities through Medicaid (Medi-Cal in California ), and another remaining 4 million seniors and people with disabilities in Medicare. There is another 800,000 children in SCHIP (Healthy Families in California ).
* The McCain campaign recently changed the health plan, saying it would require a $1.3 trillion cut to Medicaid and Medicare. (This was prompted by the McCain’s plan shift, in saying that the plan would eliminate only some, rather than all, of the tax deductions for employer-based care.)
* Such a cut to Medicare and Medicaid would mean significant reductions in benefits or access to medical providers for these children, seniors, and people with disabilities. It also would force additional cuts at the state level. California has already made significant cuts to Medicaid due to the current budget crisis, and such a cut at the federal level would compound the budget problem.
* The Obama plan would fund and expand programs like Medicaid and SCHIP: California would be first “in line” to take advantage of resources that might be available, especially since our state and county efforts already have more expansive eligibility. In short, public program expansions at the federal level will allow California to claim additional federal marching funds.

* On the Individual Insurance Market: Roughly 2 million Californians– less than 10 percent—buy coverage as individuals, but it is a bigger share of the population than other states. As a result, Californians are more likely to be denied for “pre-existing conditions.” Unlike some states, California does not have “guaranteed issue” and in fact has had many cases of rescission, where patients are denied for coverage retroactively. For those who are denied, California has a small and underfunded high-risk pool that currently has a waiting list. In terms of benefits and other policies, California has stronger consumer protections compared to other states.
* Senator McCain’s health care plan would expand the individual market, and more Californians would be at risk for being denied for “pre-existing conditions.” Senator McCain’s plan would ask patients who are denied to rely on the state’s “high-risk” pool, but the pool is inadequate for the existing population, much less a greatly expanded individual market.
* Senator McCain’s plan would also strip away consumer protections by allowing insurers to sell across state lines, avoiding California ’s existing consumer protections. According to CAPAF, insurers could avoid over 40 benefit requirements and other state laws. These laws currently require insurance companies to cover benefits like breast cancer and cervical cancer screenings and to ensure other consumer protections, from fiscal solvency standards, to providing the opportunity for an independent medical review. California consumers who want a second opinion about the denial of a treatment might not be able to go to the California Department of Managed Health Care, as is their right now, but to the insurance commissioner of another state.
* Senator Obama’s plan would institute additional insurance oversight and consumer protections, including “guaranteed issue,” and keep existing state protections, like independent medical review.

Again, the chart and reports are available at the Health Access California website, at:

* Center for American Progress Action Fund: “John McCain’s Radical Health Care Agenda.”
* Economic Policy Institute: “Under McCain Health Plan 2,407,260 People in California Would Lose Employer-Sponsored Health Coverage.”
* Health Access California : “Health Reform Proposals: McCain, Obama, and Nunez/Schwarzenegger”

Health Care for America Now is a national grassroots campaign currently asking Members of Congress, “Which Side Are You On? – the side of quality, affordable health care for all or the side of leaving us alone to fend for ourselves in the bureaucratic, unregulated insurance market? HCAN’s Statement of Common Purpose includes 10 principles the campaign believes will lay the foundation for effective, comprehensive health care reform in 2009.

Health Access California ( is the statewide health care consumer advocacy coalition, working for the goal of quality, affordable health care for all. Health Access California was the sponsor of the many HMO consumer protection bills passed in the past decade, including the creation of the Department of Managed Health Care and independent medical review. Health Access has also been actively involved in supporting numerous coverage expansion efforts, through bills and ballot measures. Health Access is a lead partner organization in California for the Health Care for America Now! campaign.

Health Care for America Now is made up of millions of individuals and more than 275 organizations nationwide. It’s steering committee includes ACORN, AFSCME, Americans United for Change, Campaign for America’s Future, Center for American Progress Action Fund, Center for Community Change,, National Education Association, National Council of La Raza, National Women’s Law Center, Planned Parenthood, SEIU, UFCW, and USAction.

Health Care for America Now and Health Access California are both section 501(c)(4) issue advocacy organizations, HCAN and each of its members conducts and funds only activities appropriate to its tax and election law status. This statement was not funded or endorsed by HCAN’s 501(c)(3) members.

Health Access California promotes quality, affordable health care for all Californians.
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