The McCain health care plan has a reverse Robin Hood effect in that it takes health care insurance away from those who need it the most and gives it to those who are healthiest and most able to afford coverage:
Health Care Destruction, by Paul Krugman, Commentary, NY Times: ...Conservative Republicans still hate Medicare, and would kill it if they could... (that’s what the 1995 shutdown of the government was all about). But so far they haven’t been able to pull that off.
So John McCain wants to destroy the health insurance of non-elderly Americans instead.
Most Americans under 65 currently get health insurance through their employers. That’s largely because the tax code favors such insurance ... as long as the ... plan ...[is] available to all employees, regardless of ... the state of their health.
This system does a fairly effective job of protecting those it reaches, but it leaves many Americans out in the cold. Workers whose employers don’t offer coverage are forced to seek individual health insurance, often in vain. For one thing, insurance companies offering “nongroup” coverage generally refuse to cover anyone with a pre-existing medical condition. And individual insurance is very expensive, because insurers spend large sums weeding out “high-risk” applicants — that is, anyone ... likely to actually need the insurance.
So what should be done? Barack Obama offers incremental reform... His plan falls short of universal coverage, but it would sharply reduce the number of uninsured.
Mr. McCain, on the other hand, wants to blow up the current system, by eliminating the tax break for employer-provided insurance. And he doesn’t offer a workable alternative.
Without the tax break, many employers would drop their current health plans. Several recent nonpartisan studies estimate that ... around 20 million Americans ... would lose their health insurance.
As compensation, the McCain plan would give people a tax credit — $2,500 for an individual, $5,000 for a family — that could be used to buy health insurance... At the same time, Mr. McCain would deregulate insurance, leaving insurance companies free to deny coverage to those with health problems — and his proposal for a “high-risk pool” for hard cases would provide little help.
So what would happen?
The ... total number of uninsured Americans might decline marginally under the McCain plan — although many more Americans would be without insurance than under the Obama plan.
But the people gaining insurance would be those who need it least: relatively healthy Americans with high incomes. Why? Because insurance companies want to cover only healthy people, and ... only those able to pay a lot in addition to their tax credit would be able to afford coverage (remember, it’s a $5,000 credit, but the average family policy actually costs more than $12,000).
Meanwhile, the people losing insurance would be those who need it most: lower-income workers who wouldn’t be able to afford individual insurance even with the tax credit, and Americans with health problems whom insurance companies won’t cover.
And in the process of comforting the comfortable while afflicting the afflicted, the McCain plan would also lead to a huge, expensive increase in bureaucracy: insurers selling individual health plans spend 29 percent of the premiums they receive on administration, largely ... to screen applicants. This compares with costs of 12 percent for group plans and just 3 percent for Medicare.
In short, the McCain plan makes no sense at all, unless you have faith that the magic of the marketplace can solve all problems. And Mr. McCain does: a much-quoted article published under his name declares that “Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.”
I agree: the McCain plan would do for health care what deregulation has done for banking. And I’m terrified.