Obama Ad Targets McCain's Health Care Plan

The crisis on Wall Street is seeping into the presidential debate over health care. On Monday, Sen. Barack Obama's campaign launched a TV ad that likens Sen. John McCain's plan to cut health insurance regulation to support for Wall Street deregulation, calling it a "prescription for disaster."

McCain's health plan would dramatically change the way health insurance plans are regulated. States are currently in charge, so if you purchase coverage yourself, the company must be licensed and approved by your state's insurance department.

"I want to give every family in America a $5,000 refundable tax credit that they can take and go across state lines, not just be confined here to the state of Pennsylvania, but if there is a better health insurance plan in Arizona, let them take it," McCain said at a campaign stop in the spring.

That's been a key element of the Republican senator's plan all along. But over the weekend, the Obama campaign discovered an article in the latest issue of the magazine published by the American Academy of Actuaries in which McCain compares his support for health insurance deregulation to his support for bank deregulation.

The Obama campaign then produced the ad, which took it a step further.

"McCain just published an article praising Wall Street deregulation, said he'd reduce oversight of the health insurance industry, too, just as we have done over the last decade in banking, increasing costs and threatening coverage," according to the ad.

But McCain's top economic adviser, Douglas Holtz-Eakin, says that's simply the wrong comparison. He says the article wasn't comparing the Arizona senator's health care plan to Wall Street deregulation at all.

"The particular analogy is the one to consumer banking, where individuals are now able to take their money out of their account at an ATM in all 50 states," Holtz-Eakin says.

McCain says his health plan would make the market more competitive and drive prices down. But critics say it also could drive up prices up for some people.

Kim Holland, Oklahoma's Democratic insurance commissioner, says she's worried that if younger, healthier people in her state decide to buy cheaper insurance with fewer benefits from a neighboring state, then rates will rise for sicker and older people.

"Though it may be beneficial in the short term for the small group that may find that market appealing, what ends up at home is a disruption and costs can go up. And that's what we're concerned about," Holland says.

Iowa Insurance Commissioner Susan Voss, who has served in her state's department under both Republican and Democratic governors, has a different concern about McCain's plan. She says she's worried about what she'll tell constituents if they have problems with plans from companies she has no authority over.

Specifically, Voss wonders, what will happen when residents in her states have reimbursement disputes with a health care plan purchased in a different state?

"Where do they go for relief? If they're buying a plan that's regulated in New York, I can't help them," she says.

Holtz-Eakin says state officials shouldn't worry.

"The individual would be able to complain in the state in which he resides," Holtz-Eakin says. "There would be, simultaneously, a coordination with the state in which the policy was issued."

However, Holtz-Eakin didn't say whether the federal government would provide state insurance departments additional money for what would very likely be a substantially increased workload.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

Support comes from: