Presumptive Republican Presidential Nominee McCain Considers 'Risk Adjustment' In Health Insurance Tax Credits

Main Category: Health Insurance / Medical Insurance
Article Date: 27 Feb 2008 - 5:00 PDT

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Presumptive Republican presidential nominee Sen. John McCain (Ariz.) has considered a proposal that would place "more money on the table" for sick U.S. residents who seek health insurance, according to McCain adviser and former Congressional Budget Office Director Douglas Holtz-Eakin, the Wall Street Journal "Health Blog" reports. As part of his health care proposal, McCain has said that he would provide tax credits of $2,500 to lower-income individuals and $5,000 to lower-income families to help them purchase private health insurance.

In a conference call hosted by Morgan Stanley, Holtz-Eakin raised the possibility of "risk adjustment" in the tax credits to help sick residents, who often cannot obtain health insurance or must pay high premiums. He said that the McCain campaign recognizes that the tax credits would have less benefit for sick residents than healthier ones. "What really matters is the ratio of cost to income," Holtz-Eakin said, adding, "The risk adjustment in the tax credit is meant to improve the ability of those people to purchase insurance if they're outside the employer market and get a policy that covers the additional risks that they might have." According to Holtz-Eakin, McCain hopes to finalize the proposal in the next few months.

He also said that McCain has "correctly chosen not to immediately focus on either an explicit mandate or other promise of universal coverage" (Rubenstein, "Health Blog," Wall Street Journal, 2/25).

Wyden Promotes Health Care Proposal
Sen. Ron Wyden (D-Ore.) has met with Democratic presidential candidates Sens. Hillary Rodham Clinton (N.Y.) and Barack Obama (Ill.), as well as many other lawmakers, in an effort to "build enough support in Congress this year so the next president has boilerplate legislation" for health care reform, the Oregonian reports. Wyden has promoted the Healthy Americans Act, a bill (S 334) he introduced in 2006 that would detach health insurance from employment and guarantee coverage for all residents (Kosseff, Oregonian, 2/25).

Under the legislation, private health insurers would provide coverage to individuals directly, rather than through employers, and employers initially would shift funds currently used to pay for coverage to employee wages. Over time, employers would have to pay the federal government a health insurance contribution (Kaiser Daily Health Policy Report, 8/15/07).

Wyden said that he will not endorse either Democratic presidential candidate "because, if I do, everybody is going to say 'Well, that means Ron's going to steer the Healthy Americans Act toward their approach.'" According to the Oregonian, the bill has received "more support in Congress than any universal health care plan in U.S. history," although several lawmakers, some of whom are co-sponsors of the legislation, "have significant problems with the proposal" (Oregonian, 2/25).

Opinion Pieces
Summaries of two recent opinion pieces that address health care in the presidential election appear below.

• Jacob Hacker, Los Angeles Times: Clinton "actually may be hurting" efforts to expand health insurance to all residents by "emphasizing" the individual coverage mandate in her health care proposal, Hacker, a political science professor at Yale University, writes in a Times opinion piece. Hacker writes that the "mandate melee obscures ... the most important features" of her proposal, as well as the Obama plan: "how they would enroll people, how they would ensure premiums stay low and how they would keep costs down." According to Hacker, an individual health insurance mandate is "valuable" but not "essential to health care reform." He concludes, "So let's have a vigorous primary fight. But let's not make small differences appear larger than they are. Doing so misses the real issues and perhaps the chance to finally solve the U.S. health care crisis" (Hacker, Los Angeles Times, 2/26).
  
  
• Douglas Turner, Buffalo News: The U.S. health care system "has been crying out for national management for two decades," and Clinton has the "strongest answer to these needs," News columnist Turner writes. According to Turner, although the Obama proposal "parallels" the Clinton plan, "fatally disabling Obama is his failure to include everybody ... a caper that undermines the strength of the insurance pool." In addition, although both Clinton and Obama "understate the cost" of their health care proposals -- $110 billion annually for the Clinton plan and $60 billion annually for the Obama plan -- "Obama's determination to low-ball her is off-putting," Turner writes. He adds, "Not only is Obama's plan underestimated, it demagogues people's biases against 'socialized medicine'" (Turner, Buffalo News, 2/25).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.