Health care for an aging U.S. population is and will be a major monetary issue for all of us. The democratic candidates each have put forth plans for Universal Health Care. These plans will cost us an amount equal to the GNP of many small countries. Voters need to see alternatives to these costly plans, but so far, the Republican candidates have fallen asleep at the wheel. There are some very good alternatives to Universal Health Care that include changes to the tax code that currently favors employer-sponsored plans and changes to state level insurance regulations that jack up the cost of insurance. So far, however, none of the Republican candidates have clearly and effectively articulated a meaningful health care reform plan. To be sure, Romney and Giuliani’s plans move in this direction, but as the title of this article suggests, the level of detail in their plans is wholly inadequate.
What follows is a synopsis of each of their plans, as best as I can tell given the dearth of information they’ve provided. In recognition of the fact that you don’t need to run a Google search to find John McCain’s health care plan on his website, I’ll begin with his plan.
John McCain–“Straight Talk on Health System Reform”
McCain articulates his views on health care in a one page summary entitled, “Straight Talk on Health System Reform.” His concerns with health care are the same as all of the other candidates from both parties: rising health care costs, health care quality, individual choice, and access to insurance. His action plan, however, is very limited, and he provides little by the way of detail. Here are the five action steps to his plan, each followed by my comments and questions:
Reform the tax code to eliminate the bias toward employer-sponsored health insurance, and provide all individuals with a $2,500 tax credit ($5,000 for families) to increase incentives for insurance coverage. Individuals owning innovative multi-year policies that cost less than the full credit can deposit remainder in expanded health savings accounts.
Eliminating the tax code’s bias toward employer-sponsored health insurance is undoubtedly the right move. But how did McCain arrive at a $2,500/$5,000 tax credit? How much will this tax credit cost and what impact will it have on the more than 40 million uninsured Americans? He doesn’t tell us.
Families should be able to purchase health insurance nationwide, across state lines, to maximize their choices, and heighten competition for their business that will eliminate excess overhead, administrative, and excessive compensation costs from the system.
Agreed. How will McCain accomplish this? We don’t know.
Insurance should be innovative, moving from job to home, job to job, and providing multi-year coverage.
Require any state receiving Medicaid to develop a financial “risk adjustment” bonus to high-cost and low-income families to supplement tax credits and Medicaid funds.
I have no idea what he’s talking about here, do you?
Allow individuals to get insurance through any organization or association that they choose: employers, individual purchases, churches, professional association, and so forth. These policies will be available to small businesses and the self-employed, will be portable across all jobs, and will automatically bridge the time between retirement and Medicare eligibility. These plans would have to meet rigorous standards and certification.
Happy talk (a term coined by a consultant friend of mine to describe statements that sound great but have no meaning. I’ll be using that phrase a lot.). Without some understanding of how McCain intends to accomplish this, the proposal is nothing but happy talk.
In the final analysis, McCain’s plan receives a 4 on the Dough-O-Meter. At present, we don’t know how much it will cost; we don’t know what impact it will have on those currently uninsured; we don’t know how he intends to accomplish some of the goals set forth in his plan; and most importantly, he has failed to give his plan a snappy name. I believe his plan attacks the health care issue in the right way (e.g., tax code changes, deregulation), but suffers from a lack of detail and analysis.
The Romney Vision for Health Care Reform
Go to Mitt Romney’s website, click on the “Issue Watch” menu item, move down to health care and click on the link. What you won’t find there is his health care reform plan. Instead, you’ll find a few pointless quotes and a video of Mitt. Question, why can’t some candidates put together a website that actually allows you to find information on their position on important issues such as health care? If a candidate can’t run a website, how can he or she run a country? Now to his plan.
Romney’s health care plan is the most detailed of all of the Republican candidates. This makes some sense given that a major health care overhaul was passed in Massachusetts under his governorship. In fact, his PowerPoint presentation walks through the Massachusetts plan in some detail. Here are the high points of his health care reform plan for the country:
Mandatory Health Insurance: Romney’s plan would require everybody to have at least catastrophic health insurance. Part of the rationale behind this element of his plan is to redirect the tax dollars currently spent to pay for health care for the uninsured. He believes that redirecting these dollars will help insure 12 to 19 million who are now uninsured. He doesn’t explain how he arrives at these numbers, which is a major short-coming. He is the only Republican candidate that incorporates mandatory insurance coverage into his plan. Unlike the candidates from the other side of the aisle, his mandatory coverage is limited to catastrophic health insurance.
Tax Reform: All medically related payments would be fully deductible, including health insurance premiums, deductibles and co-pays. This would eliminate the favored treatment the tax code currently provides to employer sponsored plans. Again, he doesn’t provide an estimate of the cost of this tax code change.
Enact caps on non-economic and punitive damages: To curb the increased costs of medical malpractice insurance and the added cost of defensive medicine, Romney proposes enacting limits on the amount of certain damages a jury can award in a medical malpractice case. He doesn’t set forth what these limits would be.
Deregulate and Reform: According to Romney, the average premium in California is $1,885 while in New Jersey it’s $6,048. He believes deregulation and reform can address this disparity. The problem is that Romney doesn’t describe how he will execute his vision for deregulation and reform.
I believe Romney’s health care reform plan offers some creative solutions that are worth serious consideration. It takes significant steps toward addressing the lack of health insurance, particularly for low income families. And rather than offering government sponsored health care insurance or mandated excessive, costly coverage, it does so within the context of the existing health care and insurance markets. Unfortunately, he has yet to provide many of the details of his plan, including a detailed breakout of the plan’s costs. For this reason, the plan gets a 3.5 on the Dough-O-Meter.
Rudy Giuliani’s Healthcare Plan
Giuliani’s plan uses tax code changes to help low and middle-income families afford health care insurance. Unfortunately, his plan fails to articulate how much the changes will cost or what impact they will have on those without health care insurance (I sound like a broken record, I know). Here are the key points of his proposal:
$15,000 Income Exclusion: To make insurance more affordable, he proposes a $15,000 income exclusion for those who do not have employer coverage. He does not articulate how much this exclusion will cost.
Health Insurance Credit: In addition, he proposes a health insurance credit for low-income individuals to assist them in buying insurance. Once again, however, he does not indicate how much this will cost or who would qualify for the credit.
Ending Frivolous Malpractice Lawsuits: He is committed to ending frivolous malpractice lawsuits, but provides absolutely no details on how he would implement such a plan.
Allow Interstate Purchase of Insurance: Some states mandate that health insurance carriers offer certain minimum benefits. The problem is that this increases the cost of insurance. Currently, you must buy insurance where you life, and Giuliani is proposing to change this. Other candidates have made similar proposals, including Romney.
Giuliani’s proposal has some real potential. Unfortunately, it lacks enough detail for real analysis. Like the other Republican candidates, he doesn’t describe how much his plan will cost, how we will pay for it, or what impact it will have on the delivery of health care or the provision of insurance to those currently uninsured. It simply amazes me that these candidates either can’t or won’t assemble a comprehensive plan that includes cost estimates and a means for us to pay for the program. Without this information, his plan receives a 4 on the Dough-O-Meter.
Fred Thompson’s Healthcare “Plan”
Let’s be clear here–Fred doesn’t have a plan to address health care issues. (I mean no disrespect by addressing Senator Thompson as Fred. That’s how he addresses himself on his website, www.Fred08.com–No, I’m not joking.) It would be one thing if he believed and articulated a view that major health care reform at the federal level was unnecessary. Agree or disagree, we’d know where he stands. Instead, we get one paragraph and five bullet points of happy talk. Since it’s so short, here are his five bullet points outlining his vision for health care, each followed by my sparkling commentary:
Realigns programs and creates a system around individual consumers and patients by providing more information and more opportunities to choose affordable health care options that best meet their needs and those of their families.
Improves the individual health of all Americans by shifting to a system that promotes cost-effective prevention, chronic-care management, and personal responsibility
Modernizes delivery and administration of care by encouraging the widespread use of clinical best practices, medical information technology, and other innovations.
Increases competition and consumer choice while streamlining regulations through free-market solutions that benefit individuals and reduce costs for employers.
Greenspan wrote this, didn’t he?
Promotes and speeds medical research and life-sciences innovation.
Yea, but what’s my co-pay?
At this point Fred’s plan gets a 5 on the Dough-O-Meter. You’ll notice that I’m moving beyond just costs when giving each plan a score on the Dough-O-Meter. The problem here is that health care needs to be addressed (if for no other reason but to address Medicare and Medicaid), and Senator Thompson has yet to offer his vision to solve these daunting challenges. We can no longer sit idly by on the issue of health care, hoping that the next administration or Congress will deal with it.
A final note to the Republican presidential candidates: You need to embrace the health care reform issue because it is important to a large majority of the American people and because the cost of health care and insurance are a serious fiscal threat to our country. Simply tossing up a one-pager on your website that articulates a lot of platitudes and an income tax exclusion isn’t enough. And Mr. Romney, please lose the clunky PowerPoint presentation.