McCain health-care plan bad for California?

Republican presidential nominee John McCain’s health-care plan could be rough on Californians, a pair of liberal policy think tanks say in reports released today.

Anthony Wright, executive director of the nonpartisan statewide consumer advocacy coalition Health Access California, heralded the reports on a conference call with reporters this morning, highlighting the “stark difference” between McCain’s plan and that of his Democratic rival, Barack Obama.

In brief, McCain’s plan relies on market forces and promotion of individually purchased insurance. He proposes eliminating the current tax exclusion for health insurance premiums and instead offering refundable tax credits for Americans buying private insurance — $2,500 for individuals and $5,000 for families, sent directly to the insurance provider. Uninsured people could use their credits to help buy insurance coverage on the individual market, and workers with employer-sponsored insurance could use theirs to offset the cost of paying taxes on their employers’ premium contributions or to purchase coverage on their own.

Obama’s plan relies on new pubic and private insurance programs, employer mandates and insurance market regulation. He proposes a new national health plan letting all Americans, including the self-employed and small businesses, buy affordable, comprehensive health coverage similar to that available to members of Congress. Nobody could be turned away from any insurance plan because of illness or pre-existing conditions, and those who don’t still don’t qualify for expanded Medicaid or SCHIP yet still need financial aid would get an income-related federal subsidy to buy into the new public plan or to buy a private health care plan.

Wright said Obama’s plan bears some resemblance to one put forth by Gov. Arnold Schwarzenegger and then-Assembly Speaker Fabian Nunez, involving expansion of government programs while requiring and incentivizing employer contributions; his office today sent out a chart comparing the Obama, Schwarzenegger/Nunez and McCain plans.

But Peter Harbage, a co-author of the new Center for American Progress report, said McCain is taking a “conservative, laissez-faire approach to health care,” essentially raising taxes on health care to achieve “this radical vision.”

See why, after the jump…

McCain wants more people to buy insurance on their own rather than getting it through employers, believing this would give them greater power and control over their insurance and care. But Harbage said California already grapples with the difficulties of individual-market health care, particularly recission – insurers dropping policies of people who make expensive claims – which Gov. Arnold Schwarzenegger called “deplorable” (even while vetoing a bill aimed at stopping the practice).

Harbage said insurers will charge more from older Californians seeking health care on the individual market, more from women, more from anyone with any pre-existing medical conditions. And if McCain makes good on his plan to let insurers offer policies across state lines, they’ll surely gravitate to states with consumer protections laxer than California’s, he added.

All this while many as 2.4 million Californians could lose the health insurance they have through their jobs and be forced to go out and buy their own on the individual market, Harbage said, citing today’s Economic Policy Institute report.

Wright said the McCain plan would send these people plus the 6 million Californians now without insurance into the individual market, where about 2 million Californians already buy their own insurance. But health care in California costs about $4,000 per year for an individual and about $13,000 per year for a family, he said — far more than the refundable tax credits McCain intends to offer.

Wright also said about 10 million Californians are now insured through public programs: about 6 million poor people through Medi-Cal, and about 4 million seniors and disabled people through Medicare. But McCain would pay for his health plan by making major cuts to Medicare and Medicaid, a top aide said this week, and independent analysts estimate this cut mean $1.3 trillion in cuts over a decade, devastating the already weakened social safety net.

The Center for American Progress is a progressive think tank headed up by former Clinton White House Chief of Staff John Podesta. The Economic Policy Institute counts “helping working people” and support for a “strong, effective labor movement” among its goals, and its founders include Carter Administration Labor Secretary Ray Marshall and Clinton Administration Labor Secretary Robert Reich. Both organizations say they’re nonpartisan, but both clearly espouse liberal policy.

Still, as Wright said, “Californians really need to look at these health-care plans.”

Josh Richman

Josh Richman covers state and national politics for the Bay Area News Group. A New York City native, he earned a bachelor’s degree in journalism from the University of Missouri and reported for the Express-Times of Easton, Pa. for five years before coming to the Oakland Tribune and ANG Newspapers in 1997. He is a frequent guest on KQED Channel 9’s “This Week in Northern California;” a proud father; an Eagle Scout; a somewhat skilled player of low-stakes poker; a rather good cook; a firm believer in the use of semicolons; and an unabashed political junkie who will never, EVER seek elected office.