Daily News Updates - Health Insurance News

Journal on McCain’s Health Plan, Pt.3 – Short-term gain; then loss, wash.

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The assertion here, is that the substantial shift from risk-pool type of health insurance to individual-risk type of health insurance will create so much competition in the free market that prices for health insurance will plummet low enough so that 25 to 30 million of the 45.7 Americans will be quick to go out and buy in. Studies show that two-thirds of this 45.7 million without health insurance have incomes below the 200% of poverty-line level. The logic is this will also have the desirable effect of "discouraging consumers from buying more coverage than they need or can afford.” Not sure if gains outweigh the losses, here.

The outlook from the economists is for health insurance quality standards to fall well-below what we’ve been accustomed to. The experts providing these analyses were Katherine Swartz of Harvard, Anne Royalty of Indiana University-Purdue University of Indianapolis, Sherry A. Glied of Columbia and Thomas Buchmueller of the University of Michigan. Their written conclusion was that eliminating the current tax exclusion would have a very negative impact on the population, who have always relied on employer-based group-risk health insurance plans. They estimate that number to be around 20 million people. They project an initial offset of about the 21 million that could afford this new individual private health insurance, by way of McCain’s proposed tax credits.

This 1 million increase in health insurance coverage wouldn’t hold for long, however. The study suggests that, in just a few years it would turn back around. The reason they give is the poor indexing. Mr. McCain has established it using the ‘regular’ inflation rate (probably the CPI – Consumer Price Index).

Continued…