July 9, 2008 7:39 AM

McCain's latest great idea: throw more money at a broken system

For anyone paying attention to health care in the states, this article in the New York Times today should come as a welcome relief. The problem of health insurance for "high-risk" individuals is perhaps one of the most difficult and perplexing knots in the dilemma of trying to achieve coverage for the nearly 50 million uninsured people in the U.S. Perhaps the best thing about this article is that it brings much needed attention to the difficulty that states are having and will continue to have in funding high-risk health coverage in times of increasing budgetary strains brought on by the energy and housing crises.

What the McCain proposal outlined in the article lacks is any real solution for how to address the problem within a comprehensive framework, and opts instead to further privatize the market by removing tax breaks for people who receive employer-funded coverage, incentivizing more expensive individual coverage plans, and throwing subsidies at a broken system, much like the much ballyhooed Massachussetts plan which hasn't really succeeded in much other than marginally increasing the number of insured and filling insurance company coffers by forcing folks to buy coverage plans they can't afford.

The main impact of McCain's plan would most likely be to further pad insurance company profit margins while doing nothing to put a lid on the spiraling costs of coverage plans and provider services. His proposal, which essentially amounts to moving the burden of providing health care from employers to workers, who will be coereced into entering the more expensive individual coverage market, seems like a recipe for further leveraging the inequities in health care coverages that currently make the U.S. the laughing stock of the developed world.

For a real solution, we need to come up with comprehensive approaches to cover all people in a way that equitably splits costs between employers and employees and which puts competition to work in a way that forces profit-bloated insurance companies to compete for people's business rather than prey on their inability to exit a captive market. Obama's proposed requirement that health insurance companies not refuse coverage to anyone is a step in the right direction, but it doesn't address the larger issue of how to avoid singling out high risk individuals for targetted bilking or how to create a comprehensive framework to help everybody achieve greater access to affordable care.

To do this, the most sensible approach is to create larger coverage pools in which risk is spread among all the participants, thus increasing everyone's access to affordable coverage and forcing insurance companies to compete for large blocs of consumers with increased clout to bargain for better rates.

Yale political scientist Jacob Hacker provides an eloquently conceived version of this approach in his comprehensive Health Care for America plan. While Obama has been influenced by Hacker's work, even he is yet to put forward a comprehensive pooling plan that would bring coverage to all Americans. Fortunately, states like Wisconsin, Washington, and Connecticut are picking up the slack.

Last year, the Wisconsin Senate passed a bill called Healthy Wisconsin that would provide coverage to all Wisconsinites through a state-administered pool of private group coverage plans on which insurance companies would have to bid and which would be funded by a payroll deduction paid by both employers and employees. The bill was defeated in the Republican-controlled House, but Wisconsin Dems are widely expected to re-take the house by running on a mandate to pass Healthy Wisconsin.

This year, Washington State Senator Karen Keiser introduced a bill modelled directly on the the Healthy Wisconsin model. Her bill got slated for an interim fincancial feasibility study and will be reintroduced next term. Connecticut jumped on board as well, introducing a more modest version of the pooling plan that would have grant voluntary access to the state's public employee group plan to non-profits and small businesses. The bill was vetoed by Republican Governor Jodi Rell, who drew much heat in doing so, opening prospects for passing the bill with or without her approval next session.

While the problem of insuring high risk individuals is one of the more pressing issues in today's health care debate, what is clear is that the kind of shortsighted measures McCain is putting on the table won't do much other than drive more people into more unaffordable care, and that the kind of real efforts to provide comprehensive coverage that are being forwarded in states like Wisconsin and others provide the example that our national leaders should be following.