Part IV in Trudy Lieberman's series on how the health reform platforms of the Presidential candidates will work for Americans published today in the Columbia Journalism Review.
Today, we follow the story of Kevin Smith, who is insured through his wife's employer, Arkansas State University. The Smiths (Kevin, his wife, and four kids) have an 80/20 health plan (insurance pays 80%; the family covers the other 20%). He and his family are considered underinsured - meaning their health insurance doesn't cover all of their needed care. They have accumulated about $7,000 of medical debt in the past year.
How would they fare under the candidates' plans?
Under McCain's Plan
McCain’s health proposals are geared toward encouraging employers like Arkansas State University to drop health insurance for their employees and encourage them to use tax credits to buy policies in the individual market. McCain would also require those with employer-based insurance to pay income taxes on the value of those benefits, perhaps another inducement to move into the individual market. For starters, though, Smith’s asthma most likely makes him uninsurable if he buys on his own.Assuming he could qualify medically, a comparable family policy currently sold by Arkansas Blue Cross Blue Shield costs about $5800. If he used the $5000 credit to buy such a policy, he might pay only $800 in premiums and save some money this year. Since this policy, like the one from Arkansas State, requires 20 percent coinsurance, he would still find himself with out-of-pocket expenses and a stack of bills. The under-insurance problem would not disappear, and down the road, there are other risks of switching. As Smith and his wife get older, the $5000 credit buys less coverage because premiums in the individual market increase with a person’s age. They could end up paying far more in premiums than if they stayed with their employer plan.
Under Obama's Plan
Because Obama’s proposals are so vague, it’s hard to say whether the Smiths would benefit. Early on, Obama said that his proposed public plan would be available to small businesses and individuals without access to employer-based coverage or public plans. That seems to indicate he wouldn’t be eligible for any kind of new public insurance option like those being promoted by Obama surrogates; that is, barring some huge legislative breakthrough that lets everyone buy into a Medicare-like plan that might offer cheaper premiums and comprehensive benefits—in short, a better deal than private insurance, whether provided by employers or bought individually.On the trail, Obama has promised that he has the secret sauce to lower insurance premiums by $2500 for a typical family. That implies his proposed cost control measures—health IT, requiring hospitals to publicly report on costs and quality, and better management of chronic conditions—will actually keep medical costs from rising.
So, they'll most likely stay uninsured.
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