Newspapers Examine Effect Of Economic Downturn On Prospects For Candidates' Health Proposals

Main Category: Health Insurance / Medical Insurance
Also Included In: Public Health
Article Date: 28 Oct 2008 - 11:00 PDT

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The current economic downturn and the recent enactment of a $700 billion bailout for Wall Street firms could have implications for the next president's health care proposal, as well as other plans, the Chicago Tribune reports. According to the Tribune, "resources will be sharply constrained" when the next president takes office, and efforts to address the "economy's overall health will be the overwhelming task of the new president and Congress, drowning out most other priorities."

The health care proposal announced by Democratic presidential nominee Sen. Barack Obama (Ill.) is unlikely to pass in Congress next year, and the plan announced by Republican presidential nominee Sen. John McCain (Ariz.) is "even less likely to pass because it relies on eliminating a popular tax break for employer-provided health care, which would be anathema to a Democratic Congress and stir strong opposition from business and labor groups," the Tribune reports (Dorning, Chicago Tribune, 10/25). "Congress is likely to look at more limited and incremental moves to expand coverage," such as an expansion of SCHIP, according to the Wall Street Journal (Wilde Mathews, Wall Street Journal, 10/27).

James Pfiffner, a public policy professor at George Mason University, said, "Both of them have promised many policy initiatives," adding, "But it's highly unlikely either one of them could get a lot of important legislation through Congress in the first year, particularly when Congress is so polarized" (Chicago Tribune, 10/25).

George Edwards, a scholar of the presidency and a political scientist at Texas A&M University, said that McCain "has very poor prospects," as his "approach to health care probably would not be the one the Democrats would pick up on" (Thomma, McClatchy/Miami Herald, 10/26).

Employers Raise Concerns About Obama Proposal
Some employers have raised concerns about a provision in the Obama health care proposal that would require them to offer health insurance to employees or pay a percentage of their payrolls into a federal fund to provide coverage, with an exemption for small businesses, the New York Times reports. According to the New York Times, although Obama has not specified the amount of the percentage, "economists believe he might require large and medium companies to contribute as much as 6% of their payrolls." In addition, Obama has not specified a definition for small businesses.

David Cutler, a Harvard University economist and adviser to Obama, said, "We made a decision even before the plan was rolled out not to decide" on either issue, adding, "It's not that there's a decision out there that we're not telling. It's literally that we've decided not to decide."

The decision "may be smart politics," but "it makes business groups nervous that Mr. Obama might impose an unmanageable burden" and that, "any time his health plan faces a shortfall, businesses will be asked to up their ante," according to the New York Times.

Meanwhile, employers also "have concerns that Mr. McCain's plan to change the tax treatment of health benefits would erode employer-sponsored insurance," the New York Times reports (Sack, New York Times, 10/27).

Additional Developments
Summaries of several other recent developments related to health care issues in the presidential election appear below.

• Catholic Healthcare West: The Chronicle on Sunday published an interview with Catholic Healthcare West CEO Lloyd Dean, who said that health care will become a priority for Congress after the economic downturn ends (San Francisco Chronicle, 10/26).
  
  
• Health care as election issue: The economy has surpassed both health care and the wars in Iraq and Afghanistan as the most important issue to voters in the presidential election, the Newark Star-Ledger reports (Mueller, Newark Star-Ledger, 10/26).
  
  
• McCain proposal: The AP/Seattle Times on Friday examined the McCain health care proposal, which would result in a "dramatic shift in how millions of people get health insurance coverage" (Freking, AP/Seattle Times, 10/24).
  
  
• Prospect of Democratic Congress, president: Democrats have begun to outline an agenda for next year that includes "overhauling the health care system" and an expansion of SCHIP, as they have become "increasingly confident" that Obama will win the presidential election and that they will increase their majorities in the House and Senate, the Washington Post reports (Murray, Washington Post, 10/26). According to the New York Times, although Democrats have controlled Congress for the past two years, they have a "pent-up agenda on health care" and other issues on which they "clashed" with President Bush (Hulse/Herszenhorn, New York Times, 10/26).

Editorials
Several newspapers recently published editorials that addressed issues related to health care in the presidential election. Summaries appear below.

• Financial Times: "The challenges facing the next president will be extraordinary," and "we hope that Mr. Obama gets the job," in part because of his proposal for "comprehensive health reform," a Financial Times editorial states. According to the editorial, the proposal would "achieve nearly universal insurance without the mandates of rival schemes: characteristically, it combines a far-sighted goal with moderation in the method." The McCain health care proposal "would contain costs better -- but is too timid and would widen coverage much less," the editorial states (Financial Times, 10/27).
  
  
• Seattle Post-Intelligencer: U.S. residents "need to use the stresses" caused by the recent economic downturn to "reinvigorate public discussion about moving toward more secure health care for all." While "neither Sen. John McCain or Sen. Barack Obama is offering support for the single-payer system we would like," the editorial states, "Obama's ideas offer more to build on." The editorial adds, "neither candidate is likely to duck the mounting crisis the way President Bush has" (Seattle Post-Intelligencer, 10/26).
  
  
• St. Petersburg Times: Obama has "qualities to unite this country and the vision to lead it in a new direction" on health care and other issues, and U.S. voters should elect him president, a St. Petersburg Times editorial states. According to the editorial, the Obama proposal "for expanding health care with a blend of public and private coverage stands up well to scrutiny," and the McCain health care "proposal costs too much to accomplish too little" (St. Petersburg Times, 10/26).
  
  
• Wall Street Journal: Recent criticisms from the Obama campaign about a McCain proposal to replace an income tax break for employees who receive health insurance from employers with a refundable tax credit for the purchase of private coverage "are especially cynical because his own health care advisers support plans much like Mr. McCain's," or "at least they did before joining up with Obama," a Journal editorial states. The editorial cites an article published in the journal Democracy in 2006 in which Jason Furman, economic policy adviser to Obama, wrote, "The fact that the tax subsidy ... is better than nothing is a feeble excuse for resisting any changes to the status quo." In addition, the editorial states, David Cutler, a professor of economics at Harvard University and an adviser to Obama, in a book published in 2004 wrote, "Health insurance is not something that is made better by tying it to employment" (Wall Street Journal, 10/25).
  
  
• USA Today: Both the Obama and McCain health care proposals "include worthy ideas," but "they read too much like summations of party orthodoxy," a USA Today editorial states. "Ultimately, the best health care plan might combine elements of both McCain's market-based reforms with mandates to make sure that everyone has access to coverage," the editorial states. "Given how contentious the campaign has been, that might seem far-fetched," but "Sen. Ron Wyden (D-Ore.) has a plan (S 334) to do just that," according to the editorial. "Even if Democrats pad their congressional majorities on Nov. 4, many of the tough issues that this nation faces won't be solved without bipartisanship," and health care reform "is no exception," the editorial states (USA Today, 10/27).

Opinion Pieces
Several newspapers recently published opinion pieces that addressed issues related to health care in the presidential election. Summaries appear below.

• John Wasik, Bloomberg: Both presidential candidates could help alleviate the U.S.'s current financial situation by helping to increase access to "affordable, portable and universal health care," according to Bloomberg columnist Wasik. Wasik writes that health care costs are "punishing" to small businesses, noting that research from the Kaiser Family Foundation and the Health Research and Educational Trust has found health insurance premiums have more than doubled since 1999 while inflation has risen 29%. As a result, only about half of small businesses provide health coverage to employees. According to Wasik, "If more people didn't feel shackled to their large employer for their group health plan, even more jobs would be created as workers could take more risks to start their own businesses" (Wasik, Bloomberg, 10/27).
  
  
• Jim Blasingame, Memphis Commercial Appeal: "McCain's health insurance proposal is very similar to" the Small Business Health Plans bill (S 2818) before Congress that would allow small companies to purchase insurance across state lines, writes Blasingame, host of "The Small Business Advocate Show" and Commercial Appeal columnist. He continues, "Obama's plan is universal health care in reform clothing and the opposite of what small businesses need because it would restrict their health care insurance options" (Blasingame, Memphis Commercial Appeal, 10/27).
  
  
• Bob Herbert, New York Times: Although few "Americans have noticed," many U.S. hospitals "are in serious, even dire, financial trouble" and the "current economic downturn" coupled with an anticipated increase in uninsured U.S. residents "will only worsen what is already a crisis," New York Times columnist Herbert writes. He writes that the "temptation" of the next president "will be to delay bold action on these fronts until the overall economic situation improves," but adds, "That is the kind of mistake ... that opens the door to additional crises." Herbert writes, "Most important, of course, is a revamping (in a sane way) of the health insurance system" (Herbert, New York Times, 10/25).
  
  
• Dan Thomasson, Seattle Post-Intelligencer: "About the only thing one can agree on when examining the [health care] promises of Barack Obama and John McCain is that both would cost more money than this country can afford at a time when headlines are proclaiming that many financially hard-pressed Americans are even cutting down on their medical prescriptions to save money," writes Post-Intelligencer columnist Thomasson. He continues, "In the current economic climate, it is irresponsible for any candidate to make promises that he must know he will have difficulty fulfilling." Thomasson concludes, "The last thing Americans seem to want to hear about health care is the truth. So neither of the two candidates is willing to tell it or even to admit that their own numbers and solutions are anything but practical" (Thomasson, Seattle Post-Intelligencer, 10/24).
  
  
• Peter Bray, Slate: "McCain's health care page has been desperately revised," with the details of his plan having been "shuttled off elsewhere," making the page now "pretty much all about his opponent," Versionista co-founder Bray writes in a Slate opinion piece. "In short, on health care, McCain is backed into a corner," Bray writes, adding, "The McCain camp now defines its health care plan in relation to Obama's attacks." According to Bray, "The assumption is that the public knows more about Obama's attacks on the plan than about the plan itself" (Bray, Slate, 10/24).
  
  
• Robert Carroll, Wall Street Journal: McCain's health insurance tax credit plan "is highly progressive and will provide a powerful incentive for people to purchase health insurance," Carroll, vice president for economic policy at the Tax Foundation and former deputy assistant secretary for tax analysis at the Department of Treasury, writes in a Journal opinion piece. Carroll writes that the "employer-based system itself is eroding," adding that eliminating the income-tax exclusion for health benefits "should reduce private health care spending," which also should "put downward pressure on the growth of Medicare and Medicaid costs. Carroll concludes, "Thus, by removing the tax bias for more generous coverage, the McCain health credit also has the potential to provide important dividends to the entitlement problem down the road" (Carroll, Wall Street Journal, 10/27).
  
  
• Scott Atlas, Washington Times: "Beware the superficial illusion of moderation -- Mr. Obama's [health care] plan is filled with fantasies about costs, new government mandates and bureaucracies, and in the end, taxes and faith in big government that necessarily will be far greater and broader than his campaign admits, or perhaps worse yet, fails to understand," Atlas, a senior fellow at the Hoover Institution and a professor at the Stanford School of Medicine, writes in a Washington Times opinion piece. He continues, "John McCain empowers the individual, not the government, by putting control of the health care dollar in the hands of Americans, so they can make value-based purchases of health insurance they actually want, rather than insurance they are forced to buy" (Atlas, Washington Times, 10/26).
  
  
• Kansas Gov. Kathleen Sebelius (D), Wichita Eagle: "It is a priority for me to see real health care reform in this country," and "I am working to elect a president who won't veto health insurance for children, who won't tax the health benefits offered by employers and who won't deregulate the health insurance industry the way he deregulated our banking industry," Sebelius writes in an Eagle opinion piece, in response to an Eagle editorial's accusations that she has been "working too hard" on behalf of Obama (Sebelius, Wichita Eagle, 10/26).

Broadcast Coverage
C-SPAN's "Washington Journal" on Friday included a discussion with Marilyn Weber Serafini, an economics correspondent for National Journal, about the positions and records of Obama and McCain on the issues of the uninsured, consumer impact and employer-sponsored health insurance. The segment is the eighth in a 10-part series on the presidential candidates ("Washington Journal," C-SPAN, 10/24).

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.

© 2008 Advisory Board Company and Kaiser Family Foundation.  All rights reserved.

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