Under McCain Or Obama $700 Billion Bailout Signals Bad News For US Healthcare Say Experts

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Main Category: Health Insurance / Medical Insurance
Also Included In: Public Health;  Cancer / Oncology;  Medicare / Medicaid / SCHIP
Article Date: 22 Oct 2008 - 0:00 PST

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The US government's 700 billion dollar rescue package to bail out the financial sector signals bad news for US healthcare, and will severely damage the nation's future healthcare plans regardless of whether McCain or Obama wins the presidency say healthcare experts.

Journalist Bryant Furlow discusses the views of healthcare experts in a Special News Report in the November edition of the The Lancet Oncology which is published early online on 22 October.

Furlow writes that John McCain plans to cut federal insurance for the poor and contain costs before expanding health insurance, and Barack Obama plans to expand coverage and to contain costs by making the system more efficient and making better use of information technology.

Sherry Glied, Professor and Chair of Mailman School of Public Health in the Department of Health Policy and Management at Columbia University in New York, believes the Obama plan offers cancer patients a better deal. She told Furlow:

"The Obama plan prevents insurance firms from looking at existing conditions or to deny coverage to cancer patients."

Glied said she thought the McCain plan was "generally bad for cancer patients and others with chronic diseases".

Richard Brown, Director of the UCLA Center for Health Policy Research and Professor at UCLA's School of Public Health in Los Angeles, California, agrees with Glied He thinks McCain's plans will:

"Undermine physicians' efforts to prevent cancer and detect it when it is most responsive to treatment because insurers will not have to cover cancer screening."

It [McCain's plan] will burden cancer patients with potentially devastating costs because insurers will be able to exclude pre-existing conditions and cancel coverage," said Brown.

Sara Collins, who led an analysis of the Obama and McCain plans published in a report released on 2nd October by the non-partisan Commonwealth Fund based in New York, New York, was of the same opinion:

"Patients with cancer and other chronic diseases have the hardest time in the individual insurance market," said Collins.

"Under Obama's plan for a new National Health Insurance Exchange, those patients would have a place to buy insurance with standard benefits," she told Furlow.

Health reform will suffer because of the government's bailout plans, wrote Furlow, and quotes Roger Feldman, Blue Cross Professor of Health Insurance and Professor of Economics at the University of Minnesota in Minneapolis, who said that:

"This will be the largest budget deficit in US history, and will present an immense challenge for either plan."

Feldman thinks reform is likely to be "very incremental and around the edges".

However, although the experts appear to agree in principle that the government's bailout of the financial sector is bad news for healthcare, they disagree about the extent of the impact.

Feldman thinks Obama's plan will be impacted more, but both plans will be hard to implement fully.

Michael Cannon, director of health policy studies at the Cato Institute, a non-profit public policy research foundation with headquarters in Washington DC, agrees. He told Furlow:

"Obama's plan involves more spending and proposes a new Medicare-like programme costing 140 billion dollars a year in new spending."

"There's not going to be money for that," he added.

But Glied disagrees with that view. She thinks McCain's plan will suffer more from the bailout. She explains to Furlow:

"It's hard to imagine Congress will want to expend political capital taking on its expense with little to show in terms of expanded coverage."

Feldman also suggests that regardless of who wins the presidency, either plan could end up being implemenented bit by bit.

"The easiest and most readily available option for Obama would be to simply expand the State Children's Health Insurance Program [SCHIP]," said Feldman.

(Last year, Congress voted to extend SCHIP to cover all uninsured American children, but President Bush vetoed the bill because it would have increased the cost of the programme by 7 billion dollars a year; he was in favour of giving families tax breaks so they could afford private insurance.)

Feldman explains that the Obama plan is different from the "Clinton master plan".

Glied agrees, saying it is more like a "building-blocks approach, already built to be incrementalist".

He [Obama] could expand SCHIP as a small piece of the plan," she added.

McCain could also take the incremental approach, for example by getting rid of employer health insurance subsidies later, said Feldman, and he, or Obama, could adopt Hillary Clinton's proposals to limit employer-paid subsidies for higher earners.

Collins suggests there are other ways to make the savings needed to offset the costs. For instance giving Medicare the freedom to negotiate better prices for drugs could save 72 billion dollars of federal government money over 10 years.

"Tobacco taxes and savings from health information technology and other strategies could reduce the cost of an Obama-like plan from $82 billion in the first year to $31 billion," she told Furlow.

"Special Report: National Financial crisis threatens US health reform."
Bryant Furlow.
The Lancet Oncology, Published online October 22, 2008
DOI:10.1016/S1473-3099(08)70234-2 1

Click here for the full report (premium content, subscription required).

Source: Lancet Oncology.

Written by: Catharine Paddock, PhD.


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