Thursday, October 11, 2007

McCain Shuffles Up to Altar of Competition to Drive Down Health Care Costs

Presidential hopeful John McCain unveiled his health care plan, "Smile if You Get Sick because There's Joy in Competition". The Senator said "We expect there to be dramatic reductions in costs." He said economic models including choice-in-competition always show savings.

I have a real world beef with his last statement, choice in competition always shows savings. Texas deregulated energy a few years back. My costs went through the roof in a "choice in competition" area. An recently released report on winter heating costs said electricity would rise to 10.3 cents/kilowatt hour. We passed that long ago. Even the short term teaser rates in West Texas are above the national average.

John plans to pay for his proposals by ending a provision in the tax code that lets employers deduct the cost of health care from their taxable earnings. If employers lose their tax advantage, whoa Nelly! This means they can finally shed that pesky health insurance benefit, sloughing it off on individual workers.

I can assure you the shift from employer sponsored health insurance to individually financed coverage will drive up hospital costs. People will choose plans with high deductibles and copays, if they can afford insurance at all. This means more patient responsibility for bills and increased self pay accounts. Rising bad debts, like rising interest costs are part of doing business, even for hospitals.

Texas requires people to have auto liability insurance and 10-15% of driver's don't carry it. While Senator McCain doesn't propose mandatory coverage, other candidates do. Why would health insurance be any different?

The good Senator from Arizona paid his pennace at the altar of competition that solves all ills. Just beware the real world results, should his plans be enacted.

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