×
First up, Doug Holtz-Eakin explaining why his candidate's health care plan won't lead to an exodus of young folks from the system:
Younger, healthier workers likely wouldn't abandon their company-sponsored plans, said Douglas Holtz-Eakin, McCain's senior economic policy adviser."Why would they leave?" said Holtz-Eakin. "What they are getting from their employer is way better than what they could get with the credit."Oops. This is what we call a Kinsleyan gaffe: He shouldn't have said it because it's oh-so-true. Young workers are cheap. They don't need much health insurance. The theory of the McCain plan is that because of this, they will take their tax credit and head over to the individual market, either purchasing very cheap health care or no health care at all. This will bring down total spending. Holtz-Eakin is saying the theory may not work. The individual market sucks. You can be eliminated for preexisting conditions. Administrative costs are sky-high. There is no protection against the whims of your insurer. The same policy you had with your employer will, for these reasons and others, cost $2,000 more on the individual market. As such, young people may fight the plan ad refuse to give up their employer-sponsored coverage. Meanwhile, Holtz-Eakin is admitting that individual insurance market is so awful that even young people, who need the least health care, would probably prefer to stay with their employer. Older folks, who need more health care, will feel that preference much more acutely. But what Holtz-Eakin is trying to do here is set this up as a choice. Choose your employer or choose the individual market. But it's not a choice. No one cares if individuals "want" to keep their employer-sponsored plans. It's whether their employers keep offering the plans, and whether people can afford to keep buying them after McCain exposes the plans to taxation.John McCain's health care plan aims to do something very simple: Raise taxes on the employer health insurance market so individuals move to the individual health insurance market. The individual health insurance is not made into a choice. It's made into a necessity. What Doug Holtz-Eakin just said is that even McCain's top advisers realize that this will mean much worse health care coverage for everyone involved. As he put it, "what they are getting from their employer is way better than what they could get with the credit." Current estimates are that his plan would lead to between 20 million and 28 million people being thrown off of employer-based health insurance. Sucks for them.But if Holtz-Eakin's claim in defense of McCain's health plan was all too true, David Cutler's claim in defense of Obama's health plan is not true at all:
Obama's policy advisers say they want to expand the employer-based system since they believe it works well."We need to build on success, not tear them down and try to build new plans," said David Cutler, senior health care adviser to Obama.Seriously? No one thinks the employer-based market is a "success." Indeed, a guy named David Cutler once wrote that "health insurance is not something that is made better by tying it to employment. As a result, essentially all economists believe that universal coverage should be done outside of employment." The theory of the Barack Obama plan is that that transition has to happen slowly, and so you shore up the employer-based market in the short-term while creating an alternative structure (Obama's National Health Insurance Exchange, which is not really tied to employers and is definitely not based on them, though employers can pay into it) that will slowly replace it over the long-term. But recognizing the political necessity of that strategy is very different than trying to convince people that employer-based health care has been a "success." Quite the opposite. It has arguably been among the most costly and perverse mistakes in the history of American public policy.
