Wrong Prescription: McCain's Healthcare Plan

PETER O. ZIERLEIN

Deregulation has worked so well for Wall Street, John McCain wrote recently, that we should use the same approach to fix our healthcare system. In the September/October issue of Contingencies, the magazine of the American Academy of Actuaries, the Republican presidential candidate asserts, "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."

McCain was writing just before Wall Street collapsed, and he obviously did not think Americans needed to be insured against the failure of a deregulated financial sector. Likewise, he was not concerned that the 53 percent of Americans who get insurance from their employers need protection from the risk of losing it. In fact, he's hoping they will lose their employer coverage, betting they'll be better off on their own in a deregulated market.

McCain's healthcare plan replaces the tax incentives for employers to offer health insurance with a tax credit for people to buy insurance on their own. This proposal embraces a "consumer directed" approach to healthcare, a model that has become popular among free-market conservatives. The more directly people bear the costs of their care, the thinking goes, the more they will drive down costs by becoming better shoppers. Under this model, employees, not employers, should pay for their care.

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