toraybon - 30 October 2008 12:44 PM

I don’t think either candidate will do anything to help health care costs. They just tell you what you want to hear. What it comes down to is funding. I talked to Gov Tim Kaine and Virginia had a great proposal. They had come up with a plan that the employer would pay a small amount per month( I think it was $50, but I can’t remember for sure), the employee would pay a small amount and the state would pick up the rest. Guess what? They couldn’t find the funding for it.

You’ve figured out what nobody wants to admit. It doesn’t matter who is elected, neither (see, there I go with the 2-party junk) of them are going to fix anything. The question of whom I vote for is “Which candidate is going to do the least damage?“ I’ve already answered that for myself.

Anyway, good luck with the insurance. Please let me know if you’re able to get a better deal. I remember what it’s like to be uninsured. My daughter was born during our uninsured time. I couldn’t depend on Blue Cross, so I depended on the Old Rugged Cross. Now that’s insurance! Or should I say, Assurance.

Has McCain ever complained about the health insurance he has been under most of his life(except 2 years),
no he has not. Why, he has always been insured/covered by the US Government.  Who’s plan is most like the plan that has covered McCain most of his life, Obama’s plan.

fromtheslide - 30 October 2008 01:16 PM

Has McCain ever complained about the health insurance he has been under most of his life(except 2 years),
no he has not. Why, he has always been insured/covered by the US Government.  Who’s plan is most like the plan that has covered McCain most of his life, Obama’s plan.

He’s also independently wealthy, so it really doesn’t matter to him whether he’s covered or not. He could pay out-of-pocket for pretty much any treatment he or a family member would ever need. What’s good for the golden goose is not necessarily good for the gander.

toraybon - 30 October 2008 12:11 PM

To Dan East
My employer doesn’t provide insurance for me or my family. I pay $5400 per year just for me and my daughter and it increases about $600 per year. My wife’s employer pays insurance on her only. We have checked and to get family insurance through my wife’s employer or on or own it will be over $10,000 per year. If McCain’s plan is so great how will it help me?

At least from what I can see Obama will offer me the opportunity to get my insurance through the same company that provides the US Senators their insurance at a group rate.

Okay, there are a number of things.  Some will happen immediately, some will change over the course of 1-3 years as employees, insurers and customers shift and adjust to an entirely new market structure.

First of all, the simple part everyone has heard, you will receive $5,000 yearly to buy your insurance.  However, you will have to pay taxes on your insurance premiums.  So if your total income is between $15,650 and $63,700, and assuming your wife’s insurance costs $5000 (probably a high figure), then you would pay 15% on your total insurance costs ($10,400), which is $1560.  So you will receive $3440 ($5000 tax credit - $1560 extra income tax) cash yearly that you do not now, so your out-of-pocket insurance cost would drop to $1960.  So right there, keeping your existing insurers, you save $3440 a year.

Next is the reform part.  Right now there are a several things that make it harder for people to get insurance outside of the workplace:
1. Insurance companies can penalize an employer for giving the money they currently pay the insurer directly to the employee.  So if your employer spends $5000 a year on your wife’s insurance, they are strongly dissuaded to give you that money straight-out for you to spend on insurance of your choice.  This, along with complete insurer-lock-in, is one of the big negatives to our current system of employer healthcare.
2. Some states have laws that enforce #1 above.
3. Many people are locked into insurance by state or by employer.  If people have complete choice over their insurance provider then the insurers must compete.  If insurance company A is currently covering your wife through her employer, and you are suddenly free to take that money and invest it anywhere, then insurance company B will match that rate.  They will be able to do that because, first, obviously it financially possible to offer insurance at that rate because company A is already doing it, and second, company B will have many new customers (your wife for one) that were completely locked out of their market before, providing the type of “group rate” discount that employers get now.

So part of McCain’s reform is to open up the entire health care insurance market, so that people are not segregated by employer or state.  This will result in a reduction of health insurance costs for individuals to that of what employers pay now.

Here is a quote from a CNN Money article:

Here’s where it gets interesting. Employers would no longer be able to buy more health care with $9,000 of their employees’ money than the workers could buy on their own. The raison d’être for corporate health benefits would vanish.

So over time (most are predicting one to three years) your scenario will change:

The $5,400 you spend for you and your daughter outside an employer’s discount will drop as the market adjusts and many insurers can compete for your business.
Your employer will have an extremely strong incentive (and no more insurance regulation or laws preventing) to simply give your wife they money currently spend on her insurance policy.  This money would then be spent on an independent plan which should cost the same as her current plan.
You will be able to have a single insurer for your whole family, which is cheaper than insuring as two different groups, saving additional money.

So as the market adjusts, the $1960 you will be paying out-of-pocket will decrease substantially (since your $5400 would be reduced to an employer’s discounted rate, and since you can have your entire family on one plan), possibly to the point that are actually making a profit.  That profit can then be put into a Health Savings Account, which can be used to pay deductibles and future medical expenses.

So Obama is offering you one additional insurance option - the current provider for federal government employees.  He’s leaving the entire, screwed up, unfair market as it is, and throwing some extra money at the problem.  McCain is offering you every insurer in every state, including those that only employers have access to, and a fundamental reformation of the entire health insurance market.

chico you missed the point, McCain pays NO out of pocket.

fromtheslide - 31 October 2008 09:44 AM

chico you missed the point, McCain pays NO out of pocket.

OK, my bad. Thanks for clarifying.

Dan,
Great breakdown and explanation of the plan! Thanks.

Chico - 31 October 2008 10:10 AM

Dan,
Great breakdown and explanation of the plan! Thanks.

I’m glad somebody read it.  It took me an hour to research and double check all the details and write that.

Dan,

First of all, you never answered my question: Do you pay your own insurance out of your pocket w/ after tax money?

If you don’t then under McCain’s plan, you probably will. Trust me you can’t get insurance for $3440.

I don’t understand what you mean by “complete insurer-lock-in”. I’m not aware of any laws that says because my employer offers insurance I have to take it. Also, the employer can shop around and change insurance companies to get better rates both for them and their employees. I used to work for a company that gave you x amount of dollars to spend on insurance, you chose the plan you wanted, any money left over went in your pocket.

I don’t believe opening up the market to insurance companies to allow for competition will decrease the rates. They know most people have to have insurance and they will charge whatever they want. I don’t think de-regulating the utility companies worked. It might in metropolitan areas, but not Southwest Virginia. There’s no competition here.

In a perfect world what you say about the price of insurance coming down may be true. But remember, you are talking about insurance companies. The same companies that let a baby die because they refused to pay for a kidney transplant.

Then you mention the Health Savings Account. They are only for people with a high deductible plan ($2200 for family) There goes your savings.

In my opinion what would help me and the people that are uninsured the most is if they would give a tax credit for individuals that have to pay their own insurance, they don’t need to change anything about employer paid health insurance and they don’t need to open up the insurance market to allow competition. I’m sure most people are paying a lot less through their employers with before tax money, than they would be paying individually with after tax money. That’s the government for you they have to make changes that affect everyone instead of just the ones who need help.

Bottom line is we could argue about this all day. I’m sure both plans will benefit many people in many different ways. I’ve sad it before and I will say it again, the candidates are just telling us what they think we want to hear. I will be surprised if either health care plan gets implemented because their just isn’t any funding for it. It’s high on their list of priorities now, but after Tuesday we won’t hear about it anymore.

Thanks for taking the time to explain the plan in detail. McCain should hire you. It sounds a lot different coming from you than him.

toraybon - 31 October 2008 11:57 AM

If you don’t then under McCain’s plan, you probably will. Trust me you can’t get insurance for $3440.

You’re paying $5400 now, and under McCain you would pay less than half that, $1960.  You don’t believe that the cost of individual healthcare will drop, but you also seem to not be satisfied with only having to pay $1960 a year, or $163 a month.  I get the impression you are wanting socialized health care, so you don’t have to (directly) pay any healthcare costs at all.  In that case, no, you will not be happy with the McCain plan.

As for me, I am uninsured.  However, I am (relatively) young and have no health problems, and my business partner is a physician specializing in Internal Medicine, so I have “insider” access to some degree of healthcare and medicine that is atypical.

Dan, for a young fellow you are very measured and thoughtful in your assessment of both political agendas. America could use young people getting involved in the political platform and I think you would be an excellent prospect. I have found the discussion so be so measured and to the point on this forum that I think any of you would make wonderful representatives for the people of your state.
We have a lot of “regular” folk involved in our political system up here and it has been a breath of fresh air! I do believe that Senator Obamba and Governor Palin are the new face of your American politics and it is wonderful to see the real change that America has undergone over the years. I congratulate you both on your maturity.

John - 31 October 2008 05:16 PM

How much are the deductibles in the scenario’s above? You can get cheaper insurance and have to pay several thousand dollars up front before the insurance kicks in or you have to pay a lot more for insurance to keep the deductible low to keep from being wiped out if you actually have to use the insurance a lot or for something big.

John, If you are referring to me, my deductible is $700. I have raised it from $350 to keep payments down. I have considered raising it to $2500, and saving money in case something happens.