Why Obama's Health Plan Is Better
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In the Wall Street Journal on September 16, 2008. Harvard Professor and Obama Health Care Advisor David M. Cutler and his coauthors show that John McCain's health-care reform plan burdens America's high-value businesses with extra taxes. In America today, high-value and high-wage jobs are also high-benefit jobs. John McCain taxes them. And when you tax something, you get fewer of them: fewer of the high-value jobs that take advantage of the skills of the American worker and produce high wages and salaries for workers and high profits for managers and business owners.
By contrast, Barack Obama's health-care reform plan lifts the health-care cost burden from the backs of America's high-value businesses in five ways: Learning how to eliminate the one-third of costs for services at best ineffective and at worst harmful. Rewarding doctors and hospitals for providing health rather than performing procedures. Pooling individuals and small firms to give them bargaining power vis-a-vis health insurers. Preventing illness through making it profitable to provide regular screenings and healthy lifestyle information, the most cost-effective medical services around. Covering more people and removing the hidden shifted costs of the uninsured by lowering premiums by $2,500 for the typical family, allowing millions previously priced out of the market to afford insurance.
The lower cost of benefits will allow employers to hire some 90,000 low-wage workers currently without jobs because they are currently priced out of the market. It also would pull an estimated one and a half million more workers out of low-wage low-benefit and into high-wage high-benefit jobs. And more workers currently locked into jobs because they fear losing their health benefits would be able to move to entrepreneurial jobs, or simply work part time.
TALKING POINTS:
John McCain taxes the high-value high-wage jobs that are also high-benefit jobs. When you tax something, you get fewer of them: fewer high-value jobs that take advantage of the skills of the American worker.
Fewer high-value jobs means reduced wages and salaries for workers and reduced profits for managers and business owners.
The big threat to growth in the next decade is not oil or food prices, but the rising cost of health care. Doubled premiums since 2000 makes employers choose between cutting benefits and hiring fewer workers.
Sustained growth thus requires successful health-care reform. Barack Obama and John McCain propose to lead us in opposite directionsﾑand the Obama direction is far superior.
Barack Obamaﾕs health-care reform plan will modernize our current system of employer- and government-provided health care, keeping what works well and making the investments now that will lead to a more efficient medical system.
Barack Obama's health-care reform plan lifts the health-care cost burden from the backs of America's high-value businesses in five ways: learning, rewarding, pooling, preventing, and covering.
- Learning how to eliminate the one-third of costs for services at best ineffective and at worst harmful.
- Rewarding doctors and hospitals for providing health rather than performing procedures.
- Pooling individuals and small firms to give them bargaining power vis-a-vis health insurers.
- Preventing illness through making it profitable to provide regular screenings and healthy lifestyle information, the most cost-effective medical services around.
- Covering more people and removing the hidden shifted costs of the uninsured by lowering premiums by $2,500 for the typical family, allowing millions previously priced out of the market to afford insurance.
Bottom line:
- $2500 per family annual premium savings.
- 90,000 more jobs for low-wage workers currently priced out of the market.
- 1.5 million more workers pulled out of low-wage low-benefit and into high-wage high-benefit jobs.
- More workers currently locked into jobs because they fear losing their health benefits would be able to move to entrepreneurial jobs, or simply work part time.
Plus
- Tax credits for those still unable to afford private coverage
- The option to buy in to the federal governmentﾕs benefits system
- Provide all with access to a portable alternative at a price they can afford.
Other countries have all these savings today.
The McCain tax hike will lead employers to drop coverage for over 20 million Americans.
What would happen to them? McCain will:
- Give them a small tax credit covering a third of premium cost.
- Tell them to navigate the individual insurance market on their own.
- Those already sick are completely out of luck
- Those who have not won a genetic lottery are completely out of luck
The Obama plan expands individual options, the McCain plan reduces them.
The McCain plan is a big tax increase on employers and workers. With the economy in recession, thatﾕs the last thing Americaﾕs businesses need.
The McCain plan does nothing to bend the curve of rising health-care costs downward:
- He does not fund investments in learning.
- He does not reward doctors and hospitals for providing health rather than performing procedures.
- He does not fund prevention
- Eliminating state coverage requirements will slash preventive service availability.
- High cost-sharing plans he envisions will similarly discourage preventive care.
- McCain does nothing about the hidden costs of the uncoveredﾑexpensive ER visits--recurring conditions resulting from inadequate follow-up care.
