McCain's Health Plan Belongs in a Bedpan

On Tuesday, Sen. John McCain (R., Ariz.) added some clarification to his health care proposals, mostly making an effort to cover individuals with pre-existing conditions such as the melanoma McCain had removed several years ago.

McCain mostly touts freedom of choice in his proposal. Unfortunately, health care choice may mean fewer people can afford health care and could end up not being covered at all. This could be a disaster for businesses and individuals.

McCain's plan presents a stark contrast to the Democrats'. Both Sen. Hillary Clinton (D., N.Y.) and Sen. Barack Obama (D., Ill.) have proposed plans coming close to universal coverage, and they plan to pay for them with tax hikes on those in the highest tax brackets. The Democrats would augment the present system by creating government programs. McCain, on the other hand, proposes a "free market" plan, which would bring drastic change of another kind.

The present health care system is far from perfect. Most people automatically enroll in health care and receive coverage from their employer. Employer-based tax subsidies make this possible.

McCain's plan puts an end to this subsidy in favor of a $2,500 individual rebate and $5,000 per family. According to estimates by the McCain campaign, this would save taxpayers $3.6 trillion over the next decade. Consumers could choose any plan in the open market.

The plan creates two problems. First, everyone would be responsible for finding their own health care. No longer would you simply fill out forms with your firm; rather, you would have to search out health care plans. This means consumers would have to spend more time researching plans.

Severing this relationship between employer/employee also strains health care firms, increasing a need for more customer service. We learned from recent quarterly reports from health care companies like Wellpoint (WLP) and Humana (HUM) that they're struggling in a competitive environment with rising health care costs, while United Health Care (UNH) suffered because of poor customer service.