Editors' Note: This piece has been corrected.
It's 3 a.m. and your child is awake. She's been up coughing all night, fever resting between 101 degrees and, for a few scary minutes, 103. You and your husband spent hours trying to decide whether to take her to the emergency room. A couple of times, you even started toward the car. But you know you can't afford a trip to the hospital. You don't have health insurance.
It's 3 p.m. and your child is finally asleep, her forehead still hot to the touch. Somewhere in the house, a phone is ringing. It's your old insurance company, the one you had before your employer decided to make you a contractor rather than a full-time employee. Sorry, they say, but your family just doesn't fit their risk profile. They've got nothing in your price range. What if we pay a little more, you ask, rapidly weighing the consequences of taking out another mortgage or shifting more purchases to credit. Sorry, the even-voiced representative says, this time more firmly, they really don't have anything for you at all.
It is a call -- or, sometimes, merely a letter -- that millions of Americans have received, particularly those not covered by large employers or the federal government. These Americans are rejected for health insurance because they were sick once, or because they're too old now, or for no apparent reason at all. They are rejected because insurers make money by not paying for care. To get an idea of how insurers think about care provision, it's worth knowing that they routinely speak of "medical-loss ratios" -- the amount of money they "lose" paying for the medical treatment of their customers. But you can't blame them, really: Insurers seek to make a profit, and some of us are simply not profitable.
It is not a call that John McCain has ever received. As Sarah Arnquist has written, aside from his awful internment in a Vietnamese prison camp, it is hard to find a day in McCain's life when he was not sheltered by the government-run health care he now claims to loathe. Born the son of a Navy admiral, he was cared for by Navy physicians during his childhood. After graduating from high school, he enrolled in the United States Naval Academy, and the military's care continued until he retired from the service in 1981. In 1982, he won a seat in Congress, ushering him into the Federal Employee Health Benefits Program, and in 2001, he qualified for Medicare. When he says, "we have the highest quality of health care in the world in America," he is speaking as a man who has enjoyed a lifetime of government-run care.
But now John McCain is seeking the presidency as a Republican, and a healthy distaste for government-run health care is de rigueur. "I am convinced," said John McCain at Miami Children's Hospital, "that the wrong way to go is to turn over your lives to the government and hope it will all be fine. It won't." Spoken like a 71-year-old whose government health coverage has kept him healthy enough to run for the presidency.
Government health insurance, like large employer health insurance, is based on a simple concept: Risk pooling. The more of us in this together, the more our health risks will average out among the population. When I'm sick, many more will be well, and so the group will be able to bear the costs of my illness. Moreover, the greater the size of the pool, the greater our ability to negotiate better deals, demand fairer treatment, and generally find market strength in numbers. This is true, in a maximal sense, for Medicare, with its tens of millions of members and ability to set doctor-payment rates. And it's relatively true for large employers. Democrats, in general, want to expand this model, bringing more people into government and employer options, and ensuring that ever fewer individuals are forced to face the health system on their lonesome.
In contrast, McCain would like to take the health-care system in the opposite direction, toward an individual market where individuals seek coverage without the protection of large insurers or the government. Thus, the core of McCain's health-care proposal is a tax credit designed to ease people out of employer insurance and help employers pull away from offering coverage. McCain would give individuals a $2,500 tax credit and families a $5,000 tax credit meant to help them seek cheaper coverage options, such as health savings accounts, in the private market. And it is this cheaper coverage that is truly the point of McCain's health plan. "I would seek to encourage and expand the benefits of [health savings] accounts to more American families."
The benefits of those accounts are simple: low monthly premiums. The drawbacks are similarly clear: very high deductibles, lots of personal financial risk, and relatively sparse coverage. "These accounts put the family in charge of what they pay for," enthuses McCain. But that's not quite accurate. Individuals have no more autonomy under these accounts than in a traditional sense. They are just more acutely sensitive to the price of their care, which means they'll purchase less of it, and overall health spending will fall.
If you're young and unlikely to get sick, these accounts are a good deal, as you'll pay lower premiums. If you're not as demographically and genetically blessed, they're a bad deal, as you'll pay much more out of pocket for your care. They are, in other words, the logical extension of the modern health coverage marketplace: They're health insurance for people who don't need health care.
Give McCain this: His philosophy is clear. McCain believes that Americans use too much health care, and he has created a plan that will make care less affordable so millions of Americans will use less. He even has a euphemistic description for this approach: "The key to real reform," he says, "is to restore control over our health-care system to the patients themselves … These accounts put the family in charge of what they pay for."
That's undoubtedly true. Parents weighing an emergency room visit they can't afford no doubt realize that they are in charge of what they are paying for. They are certainly more "price sensitive." They are certainly not acting with the wanton disregard of an insured family who seeks care for their feverish child without a second thought. The question, of course, is whether this sort of cost sensitivity is desirable.
So ask yourself this question: It's 3 a.m. one December night in 2010 -- one year after health reform was passed. Whose signature do you wish were on that bill? The president who believed you needed health insurance, and the peace of mind to seek medical care? Or the president who believed you needed more "price sensitivity," and left you to the tender mercy of the insurers? Are we in this together, or are we better off alone?