The Wall Street Journal has a good summary on the health care plans of both candidates in the upcoming presidential election (thanks to Paul for sharing this on Google Reader; please also congratulate him on his recent nuptials).
Let's be frank: both of these plans suck. Neither deals with the real problem of health care in this country. There is an artificial demand on the health care system created by a dearth of doctors and the restrictions on acquiring prescription drugs, among other things. All these things drive the cost of health insurance and raise it to exorbitant, unaffordable levels. Currently, health care costs in the U.S. are estimated to be approximately 15% of GDP, and expected to rise to 19% by 2017.
According to the Bureau of Labor and Statistics, over one-third of doctors in 2006 worked over 60 hours per week, and there were approximately 633,000 doctors, a mere 1 for every 475 people in this country. And why do we need to see these overworked physicians to get simple prescriptions for penicillin and allergy medicine? While honeymooning in Greece a few years ago, I experienced my first allergic reaction to some bad fish. My face had swollen to twice it's normal girth and I itched all over. My ever resourceful wife ran to the nearest pharmacy and purchased some Zyrtec over the counter, which instantly eliminated my symptoms. Had I suffered from this allergic reaction in the United States, I would have surely perished from an acute case of big red face disease (BRFD) since I wouldn't have been able to get such a simple drug without visiting my family practitioner and getting a prescription. These things drive the cost of health care up as we rely on the few physicians we have to do mundane things. The demand on the health care system is entirely artificial. These two problems could easily be solved by graduating more physicians every year (accounting for the rate of population increase), and easing restrictions on the purchase of simple prescription drugs (an illiterate child in India can get penicillin from the local pharmacy, but a Ph.D. in pharmacology can't in the U.S.).
That being said, neither candidate wants to tackle the root of the problem. Instead, they both want to exacerbate the issue by doling out government lucre in the form of tax credits (McCain) or a federal insurance program (Obama). By giving away money in either form, all they're really doing is feeding into this artificial demand enforced by the current system. The previously uninsured sector of the population will increase the demand on an already-strained insurance industry. Nothing would be done to alleviate the supply issue. To top it all off, both plans would cost trillions of dollars over the next 10 years at a time when the deficit has reached its highest level yet (in unadjusted dollars, though not as a percent of GDP).
If I had to pick one of these odious plans over the other, I'd opt for the McCain plan. It makes some token moves in the right direction, but still falls short of addressing the system's fundamental problems. Deregulation of the health insurance market is one of its more attractive aspects. McCain advocates the removal of the restrictions on purchasing health care plans from companies across state lines. Current law prevents consumers from buying into a plan in another state. Removing this restriction would increase competition between HMOs and help to lower the price of coverage overall, though in light of the aforementioned problems this might have minimal impact on the cost. Still, I can agree with the principle behind it, as deregulation also offers the consumer more in the way of health care choices.
Another positive aspect to the McCain plan is its push away from employer-based insurance by giving a $2,500 tax credit to individuals (or $5,000 for families) to purchase a health care plan. While I'm against giving away this kind of money without addressing the issue of the artificial demand, the side effect of veering away from employer-sponsored health programs is a positive thing. People should not have to base their health insurance status on their employment. Losing your job means losing your health care, and that is something that really shouldn't be dependent on anything. One should be able to secure a health care plan regardless of employment status, a failing system revealed by the fact that about 1 in 7 people don't have health insurance in this country. In this op-ed from the Wall Street Journal, David Gratzer of the Manhattan Institute argues that the employer-based health insurance system has become defunct. (Interestingly enough, one of his references for this assessment is one of Barack Obama's economic advisors, David Cutler).
In any case, both plans are decidedly the wrong course of action, but McCain's has token elements that nudge the industry in the right direction. I will be voting for the lesser of these two evils.
