The candidates & public welfare

Oct. 12, 2008

Everybody is struggling with the high cost of health care. As health insurance premiums rise relentlessly, many individuals and businesses can no longer afford it or provide it.
There are 1.1 million people without health insurance in Michigan and countless others are “under-insured.” Their coverage doesn’t cover that much. It’s difficult for American business to provide health care when so many global competitors do not, because their home countries provides it.
Health Care for America (HCAN) is a new organization that is bringing people together to discuss what can be done to solve the problem. The goal of the campaign is to discuss what kind of reform makes sense and how we can build political support for moving national legislation in 2009. We are holding a community meeting on October 24 at 7 p.m. at the Unitarian Universalist Congregation, 6726 Center Road, Traverse City, to discuss health care and what can be done to reform it in 2009.

CANDIDATE DIFFERENCES
With both Barack Obama and John McCain talking about health care, it provides an opportunity to discuss and compare the candidates‘ positions. Voters can then make up their own mind as to which proposal makes sense and which candidate deserves their support.
When we look at the positions of the candidates, the differences could not be more striking.
McCain wants to radically change how we treat employer-paid health care. Right now, if you receive health care from the company you work for, it’s viewed as a “benefit.” McCain wants to change the law so that health care a company pays for is viewed as “income” to employees. These employees would then have to pay taxes on their health care benefits.
The cost of a typical plan provided by an employer is $12,106, of which an employer pays $8,824, and the worker pays the remaining $3,282 (deductibles, co-pays, etc.). The median household income is $44,389, which places most Americans in the 15 percent income tax bracket. McCain wants to add the employer’s cost – an additional $8,824 – to that middle income family’s income, then tax it. The hit to an average family is 15% of that $8,824, for an additional $1,323 in income taxes.
McCain does say that he wants to provide a $5,000 tax credit for families and $2,500 for individuals to help pay for health insurance. But this only applies if you buy insurance on your own in the private insurance market. It will not apply if you continue to get insurance where you work -- you will be stuck paying $1,323 in higher taxes.
McCain’s goal is to get families out of employer-paid health coverage and into the private insurance marketplace. But this would force millions of Americans into the most expensive private insurance system, the “non-group” market, where cost sharing is high and covered services are limited. People would lose benefits they have now under the employer-based system.

OBAMA‘S OPTION
Barack Obama’s proposal is to build upon the strengths of the current system and fix what isn’t working. If a person or business prefers their current private insurance plan, then they could keep it under Obama’s proposal. Nothing would change. But, if you don’t like your current plan, or you can’t afford insurance in the private insurance market, you would then have the option of joining a “public health insurance plan” created by Obama‘s administration. This plan would offer insurance similar to Medicare.
The advantage of public insurance is that premiums will be significantly lower because administration costs are much less and there isn’t a tacked-on profit component. Medicare is public insurance for seniors that is very popular and is very cost effective. Studies have shown that administrative costs for Medicare is three-to-four percent as compared to private sector insurance, where administrative costs run from 25-to-40 percent on every health care dollar spent.
Creating a public insurance option and giving people and business a choice on where to purchase health insurance will create real competition in the marketplace, which will drive down the cost of insurance.
Reducing the high cost of health care is critical because recent census data shows that when adjusted for inflation, employees in 2007 are making less money than they were in 2000. So at a time when workers are making less money, the cost of health care keeps going up, which is why every year more people go without health insurance.
And this brings us back to why we have a health care crisis in this country that must be addressed in 2009.
We welcome everybody to attend our community meeting. The meeting is free and all welcomed. Light refreshments will be served. HCAN want to hear what your experience has been with health care and what can be done to fix it.

John Freeman is the Michigan state director of Health Care for America Now (HCAN) and a former Michigan State Representative from 1993 – 1998, representing, Madison Heights, Royal Oak and Hazel Park.