Commentary: McCain's Healthcare Plan

Sen. John McCain Thursday tried to distance himself from the embarrassing statement of one of his top economic advisers ex-Sen. Phil Gramm that the financial distress felt by so many Americans was simply a "mental recession."

But, the presumptive Republican nominee for President has his own disconnect with the American public with the inadequate healthcare plan he has proposed.

OK, it's easy enough to pile on ex-Sen. Phil Gramm for mocking the plight of Americans losing their homes by saying it is all a "mental recession."

Of course, from the rarified environment Gramm rides around in, he's probably not noticed the 59 percent of Americans who told a June Kaiser Health tracking poll that they are having a "serious problem" with paying for gas, getting a decent paying job, or health care or food bills.

But while John McCain tries to distance himself from the mess created by Gramm, one of his top economic advisers, the soon-to-be Republican nominee, seems to have his own let them eat cake perspective on one of the most critical issues of this campaign, health care.

It shouldn't be much of a stretch to discover the deepening crisis on health care felt by so many American families. Take the June report in the Wall Street Journal, a paper the McCain team no doubt manages to read, citing a survey of 18,000 Americans who said they'd delayed or gone without needed medical care due to the cost.

Or the Robert Wood Johnson study in April showing premiums for families who get employer-sponsored health coverage have jumped 10 times faster than workers' wages in this decade.

Or the New York Times report in June about the insurance companies that now reject the applications for coverage from women who given c-section births.

But with our health care safety net collapsing and more people going without health coverage and self-rationing care, McCain seems to be frozen in the abysmal status quo. His healthcare plan offers little relief from the present morass, and, if anything, is likely to make the crisis worse.

McCain's healthcare platform rests on four very wobbly legs:

Tax credits to encourage the uninsured to buy private insurance. But once a year tax credits are of minimal help for those living paycheck to paycheck, especially with no controls on ever skyrocketing premiums, co-pays, deductibles, doctor's fees, and a mountain of other out-of-pocket costs.

Expanding federal support for state "high risk pools" as the dumping ground for people with pre-existing conditions (or, as Barbara Ehrenreich calls them, prior convictions) who the insurance companies refuse to sell policies to. But, in a devastating critique of this scheme this week, the New York Times noted that the state plans are largely a failure. Almost all impose long waiting periods, up to a year, before allowing you to enroll, and all have very high costs for getting in. Florida closed its pool in 1991, and the current membership is just 313 people, rather a small percentage of the state's population. And, by the way, McCain has no proposal to pay for a federal expansion of this train wreck.

Eliminating the tax deduction for employer-sponsored coverage. The inevitable result will be to make health benefits less attractive to employers, meaning the decline of employer-based plans would become an avalanche -- and far more risk and financial burden will be shifted to families and individuals who hardly need more financial worries in the present "mental recession," as Phil Gramm puts it.

More deregulation of the insurance industry to encourage competition, McCain's prescription for controlling the ever rising costs. It's hard to imagine a more friendly administration to the avatars of deregulation than the one currently in office, during which premiums alone have gone up 78 percent the past six years for family coverage under employer plans, as the Atlanta Journal Constitution noted July 6.

Further, the notion that insurances compete by offering expanded access or reduced out-of-pocket costs requires much suspension of disbelief. Insurers compete by lowering their own costs, to increase company profits and shareholder return. How do they lower costs? By denying medical claims which they ghoulishly term "medical loss ratio," dumping enrollees when they get sick, and reducing services that are covered.

Since he is so averse to regulation, it's not surprising that McCain has nothing to offer the tens of thousands of patients and families grappling with insurance company decisions to deny medical procedures recommended by their doctors, or delay care, or reject diagnostic procedures or referrals to specialists, or impose higher charges for going "out-of-network." Apparently those problems don't even exist.

McCain hasn't yet said the nation's healthcare crisis is psychological, but it sure looks like all he's offering are words of encouragement and placebos.

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