Kaiser Daily Health Policy Report

Wednesday, April 30, 2008

Election 2008

      Presumptive Republican presidential nominee Sen. John McCain (Ariz.) on Tuesday in a speech at the H. Lee Moffitt Cancer Center & Research Institute in Tampa, Fla., detailed his health care proposal and for the first time proposed a plan to help individuals who cannot obtain private health insurance because of pre-existing medical conditions, the Miami Herald reports (Dorschner, Miami Herald, 4/30). The proposal would replace a tax break for employees who receive health insurance from employers with a refundable tax credit of as much as $2,500 for individuals and $5,000 for families for the purchase of private coverage, which McCain maintains would promote competition among health insurers, reduce costs and improve quality. In addition, the proposal would allow the purchase of health insurance across state lines (Reichard/Nylen, CQ HealthBeat, 4/29).

"The key to real reform is to restore control over our health care system to the patients themselves," McCain said (Meckler, Wall Street Journal, 4/30). Under the proposal, health insurers "could no longer take your business for granted, offering narrower plans with escalating costs," he said. McCain added that the proposal would "help change the whole dynamic of the current system ... forcing companies to respond with better service at lower cost" (Shear, Washington Post, 4/30).

Guaranteed Access Plan
During the speech, McCain for the first time proposed a Guaranteed Access Plan in which states would offer coverage to individuals unable to obtain private coverage because of pre-existing medical conditions or no prior group coverage. The proposal would be based on state experiences in providing "high-risk" pools to the uninsurable and encourage states to contract with private health insurers to establish such pools.

"The details of a Guaranteed Access Plan will be worked out with the collaboration and consent of the states," McCain said, adding, "But conceptually, federal assistance could be provided to a nonprofit GAP that operated under the direction of a board that included all stakeholder groups — legislators, insurers, business and medical community representatives, and most importantly, patients." He said, "There would be reasonable limits on premiums, and assistance would be available for Americans below a certain income level" (CQ HealthBeat, 4/29).

However, he promised not to "create a new entitlement program that Washington will let get out of control" or "saddle states with another unfunded mandate" (Washington Post, 4/30). McCain adviser Douglas Holtz-Eakin said that the pools could provide health insurance for between five million and seven million individuals and cost between $7 billion and $10 billion annually (Cooper/Sack, New York Times, 4/30).

In addition, McCain during the speech discussed proposals to expand the use of health savings accounts and encourage the use of electronic health records and other technologies to reduce costs (Washington Post, 4/30). He also discussed a proposal to "bundle" Medicare reimbursements for all services related to the treatment of a single medical condition (CQ HealthBeat, 4/29).

A webcast of the speech is available online at health08.org.

Reaction
In a statement, Democratic presidential candidate Sen. Hillary Rodham Clinton (N.Y.) said that the McCain proposal would eliminate the "policies that hold the employer-based health insurance system together, so while people might have a 'choice' of getting such coverage, employers would have no incentive to provide it" (Quaid, Miami Herald, 4/29). Clinton also said that the Guaranteed Access Plan has "fundamental flaws." She said, "Older Americans or those with pre-existing conditions would be allowed to get only one type of coverage in a high-risk GAP pool," adding, "That kind of arrangement does more to help insurers than individuals."

Hari Sevugan, a spokesperson for Democratic presidential candidate Sen. Barack Obama (Ill.), said, "McCain is recycling the same failed policies that didn't work when George Bush first proposed them and won't work now" (Washington Post, 4/30). The McCain proposal would provide a "tax break that won't guarantee coverage and doesn't ensure that health care is affordable for the working families who need it most," Sevugan added (New York Times, 4/30).

McCain adviser Carly Fiorina said, "Clinton and Obama would put the government in charge of the choices you have to make," adding, "John McCain's plan puts the choice, the power, the decision in the hands of the individual and the family."

Drew Altman, president and CEO of the Kaiser Family Foundation, said, "Health will increasingly become reframed as part of the broader pocketbook and economic concerns," adding, "The real health reform debate hasn't really begun -- the debate between the Democrats and the Republicans about the fundamental differences in how to reform health care" (Washington Post, 4/30).

CNN on Tuesday included a discussion with Elizabeth Edwards -- a senior fellow at the Center for American Progress and wife of former Democratic presidential candidate and former Sen. John Edwards (N.C.) -- about the McCain health care proposal (CNN, 4/29).

Campaign Advertisements
In other presidential election news, the American Leadership Project and the Service Employees International Union both have released new television advertisements that criticize the health care proposals of Obama and McCain, respectively, the Washington Post reports. The ad sponsored by ALP, a group established by Clinton supporters, states that the Obama health care proposal would leave "as many as 15 million Americans uncovered." The ad sponsored by SEIU, which has not endorsed a presidential candidate but supports Obama, states, "Like President Bush, John McCain won't stop rising health care costs" (Mosk, "The Trail," Washington Post, 4/30). The ad, which has aired in Ohio, continues, "When it comes to making health care affordable ... we'll still be feeling the pain."

On Tuesday, the McCain campaign released a new TV ad that focuses on health care. In the ad, which has aired in Iowa, McCain says, "I can characterize my approach on health care by choice and competition, affordability and availability" (Washington Post, 4/30). McCain adds, "The problem with health care in America is not the quality of health care -- it's the availability and the affordability. And that has to do with the dramatic increase in the cost of health care" (Boston Globe, 4/30).

Editorial
The "public discomfort over health care will resurface as a genuine policy dispute between the Democratic and Republican nominees," and McCain on Tuesday "offered a sophisticated set of policies that could lead to some of the most constructive changes to the system in decades," according to a Wall Street Journal editorial.

The McCain proposal, which indicates that he is "making space now for political creativity and policy risks," will "frontally assault liberal health care assumptions" with a focus on a "broader political and economic argument than the exclusive liberal concentration on the uninsured," the editorial states. McCain maintains that the "health insurance and delivery system is in fact failing many Americans -- but that it was failing because of market distortions mostly created by the government itself" -- and that proposals to address "these irrationalities would both make insurance more affordable and increase overall coverage in the bargain."

According to the editorial, although "short of ideal," the proposal "energizes the intellectual progress conservatives have made in recent years in their health care thinking." The editorial concludes, "Fortunately, it looks as though the curtain is rising for a necessary debate about the role of government in health care" (Wall Street Journal, 4/30).

Opinion Piece
The difference between the Clinton and Obama health care proposals is "really a distinction of process" -- Clinton has made a requirement that all U.S. residents obtain health insurance her "ultimate goal," and Obama seeks "expanded coverage," Daniel Widome, a writer and policy analyst, writes in a San Francisco Chronicle opinion piece.

According to Widome, the "health care debate highlights a far more important distinction between Clinton and Obama," which extends "beyond the differences in their policy objectives to whether either one could actually achieve them as president." Clinton "is the policy wonk and political streetfighter ... who seems to enjoy the fight as much as the outcome," and Obama has focused on "pragmatism and a commitment to make government more transparent and accountable," according to Widome.

He writes, "Both candidates have demonstrated their commitment to meaningful health care reform," but the "question is who is more likely to produce results," adding, "On that basis alone, the distinction is clear" (Widome, San Francisco Chronicle, 4/30).