McCain's Health Care Plan: The Wrong Solution for Workers

By Gonzalo Baeza

We compare McCain’s health care plan with AFSCME’s proposal to guarantee affordable, quality health care we can all count on.

Photo Credit: Getty Images/Darren Hauck 

The diagnosis is simple: Our health care system is broken and it’s hurting America’s families and businesses. That’s why AFSCME is waging a national campaign to win a common sense solution to our crisis — one that guarantees quality, affordable health care for all.

U.S. Sen. John McCain (R-Ariz.), the presumptive Republican Presidential nominee, rejects this goal. Instead, he would continue the polices put forth by Pres. George W. Bush without addressing the problems that afflict our broken system. 

Fixing America’s health care system must be a priority for all of us — especially union members. As health care costs rise, we are being forced to sacrifice our wage increases at the bargaining table just to maintain our health care. Health insurance premiums are going up three times faster than our pay, and many of us are shouldering a growing share of the costs. We are paying more and getting less — while being forced to fight with the insurance companies to get our care covered and our bills paid.

Our Benefits at Risk

The average annual cost for health insurance premiums is more than $12,000, almost two times what it was in 2000, when President Bush took office. Likewise, the average cost paid by workers is now nearly $3,300 a year, more than twice what it was eight years ago.

Rising costs have a double effect. On the one hand, they squeeze state and local government budgets, making it harder for public employees to negotiate wage increases at the bargaining table. Cost hikes also put our jobs at risk as employers are lured by private contractors who promise to do the same work for less cost — because they pay lower wages and don’t provide workers with any health benefits.

As health expenses skyrocket, more people are now uninsured. According to the U.S. Census Bureau, 47 million Americans had no health insurance in 2006, nearly 8.6 million more people than in 2000.

With costs so high, the uninsured usually wait until an illness becomes serious before seeking medical attention. As a result, they must often resort to costly emergency rooms because they don’t have a regular doctor. When those without insurance can’t pay their bills, the hospital must make up the difference by charging the rest of us more. This is problematic for the uninsured and those of us who have insurance. For an average annual family policy of $12,000, more than $1,000 covers costs for the uninsured. Paying the bill this way is expensive and inefficient.

That’s why the time is now to guarantee quality, affordable health care we can all count on. To achieve this, AFSCME has developed “Health Care for America” — an initiative to protect and improve our health benefits, control skyrocketing costs and assure affordable coverage for everyone.

How does AFSCME’s plan compare with McCain’s prescription for America’s health care system? AFSCME WORKS examines both programs so you can decide for yourself.

AFSCME’s Plan: Health Care for America

AFSCME’s Health Care for America is a five-point plan to secure affordable health care for all:

Guaranteed choice of plans — If you like your plan, you should be able to keep what you have.

Employers pay their fair share — All employers should provide benefits to their employees or make a contribution towards their health care costs.

Government must be an advocate for us — The government should help lower the cost of health care and improve quality, as well as keep insurance and drug companies in check. We need to regulate what insurance companies charge, how they pay claims, and prevent them from delaying and denying care.

Choice of a public plan — Everyone should be able to choose a public plan like Medicare, the most cost-effective program in the country. That’s because it allows people to select their own health care providers, and then the cost of illness is spread over a large pool of patients.

Comprehensive, quality benefits — Everyone must have comprehensive benefits and high-quality care.

McCain’s Plan: You’re on Your Own

John McCain takes a totally different approach than we do. Taking the lead from a widely-criticized proposal advanced by President Bush in 2007, he wants to radically transform our health care system from one where people get insurance on the job to one where people are left to fend for themselves in an unregulated insurance market. While AFSCME’s initiative spreads risks and costs by bringing people together, McCain’s plan encourages employers to drop their group coverage, forcing us to be on our own in the marketplace. While AFSCME’s plan would preserve comprehensive benefits, McCain’s would encourage the development of a system with very high deductibles, up to $11,000, and high individual co-payments for services.

Senator McCain will also impose a massive new tax burden on workers by treating their health benefits as income. In other words, if your employer contributed $9,000 a year towards the cost of your health insurance, you would be taxed on that amount even though you never received this money in cash. This tax increase would be partially offset by a modest tax credit that covers less than half the average health plan premium. His rationale is that by shifting costs to workers, we will use less health care. As he said during a Republican primary debate in December: “[N]obody ever washed a rental car. And that’s true in health insurance. If they’re responsible for it, then they will take more care of it.”

This is why we call McCain’s approach the “you’re on your own” plan. He would make federal tax code changes that would encourage employers to stop offering health benefits. This scheme will only push more people into substandard individual plans that would cost them more than acquiring them as part of a group. His plan means getting less — and paying a lot more than we do now.

McCain’s plan would leave patients at the mercy of the insurance companies by overriding state rules that protect consumers from company abuses. Furthermore, he refuses to use the government’s huge purchasing power to negotiate discounts with prescription drug companies. Instead, he will let them charge whatever the market will bear. His approach calls for limiting government oversight of health insurers and reducing its ability to address abuses such as denying coverage to those who have pre-existing conditions or canceling coverage when someone becomes ill.

Finally, McCain does not offer consumers the choice of buying into a public plan that’s a good value such as Medicare. He relies on the big insurance companies that are largely responsible for our current problems. According to the Government Accountability Office, administrative costs for Medicare are under 3 percent, while administrative costs for private insurance average 15 percent — and can be as high as 50 percent for individual coverage.

Which Side Are You On?

Should America guarantee quality, affordable health care we can all count on or will we continue to be at the mercy of the insurance industry?

For AFSCME, the answer is clear. That’s why our union is chairing the AFL-CIO’s campaign for health care reform and is a co-chair of Health Care for America Now!, a national, grassroots movement powered by millions of supporters who believe in an America where every family deserves the best medical care in the world.

You can get involved by taking the steps listed below.

What You Can Do

Here are three things you can do to help win quality, affordable health care for all:

1. Tell your elected officials to support reform.Go to afscme.org/healthcare and sign the “AFSCME Health Care Petition.”

2. Talk to your co-workers, family and friends. Download the Health Care for America leaflet so you can share more information about AFSCME’s plan for change.

3. Get active on health care reform! Support candidates and elected officials who are willing to take the lead on this important issue.

Big Money in the Insurance Lobby

Reforming our ailing health care system will be a high-stakes battle pitting working families against powerful interests seeking to preserve the status quo: the drug industry, insurance companies and the politicians that cater to their every demand.

Drug and insurance companies have a vested interest in influencing public policy and legislation. As the Congressional Quarterly website reported on Sept. 17, 2007, “In the first half of 2007, the health care sector doled out more than $227 million for lobbying efforts — the first time spending has topped $200 million.”

The insurance industry made $15 billion in profits in 2006 amid spiraling costs for the rest of us. Meanwhile, pharmaceutical companies were the second most profitable U.S. industry in 2006, with profits of nearly 20 percent compared to the average 6 percent for all Fortune 500 companies. On top of that, the average 2006 compensation for CEOs in the health and disability insurance business was $8.7 million while the average pharmaceutical industry CEO raked in $4.3 million. This, at a time when the average worker earns less than $30,000 a year and faces a daily battle to put food on the table, gas in the car and a roof overhead.