The health plan proposed by Sen. John McCain (R-AZ) would, by design, replace employer-based health insurance with individual-market insurance—a concern for people with chronic disease. Employers do not charge workers or their families different premiums based on their age, gender, health status, or health history. They also offer equal benefits and choices of plans. The individual market, however, plays by different rules. Individual insurers in most states can exclude people with pre-existing conditions directly by denying them coverage or indirectly by charging them exorbitant premiums.1
This could be remedied with stronger rules for insurers—but the McCain plan moves in the opposite direction. It would allow insurers to play by the rules in any state—including the one that has the least protection for people with chronic diseases.
According to an analysis of the National Health Interview Survey, 56 million non-elderly adults with employer-sponsor health insurance have at least one of 12 chronic illnesses.2
This does not count chronically ill children with employer coverage who would also be at risk of losing coverage under the McCain plan. Employers insure 62 percent of all adults with chronic illness, including (note: numbers add to more than 56 million because some individuals have multiple diseases):
- 21.2 million with hypertension
- 18.5 million with arthritis
- 7.8 million with asthma
- 6.3 million with diabetes
- 5.5 million with cancer
- 4.5 million who experience disruptive anxiety or depression
If these Americans were to lose health coverage through employers, they might not be able to regain it. Research has shown that over 70 percent of individuals in poor health found it very difficult or impossible to find affordable, individual-market coverage.3
Compared to people in excellent health, premiums in the individual market are 43 to 50 percent higher for people with major health problems.4
Providing extra tax credits for high-risk people, as McCain has proposed, would reduce, but not eliminate, this problem. In short, the McCain plan may make it harder to get health insurance for people who need it the most.
Edwards Lambrew Response to McCain Health Speech:
Data analysis by Katherine N. Arnold.
Endotes
1. The Health Insurance Portability and Accountability Act (HIPAA) offers continuously-insured individuals losing group insurance with guaranteed access to the individual market or a high-risk pool. But because this guarantee is not linked to limits on the premiums that can be charged, the law has not achieved effective access to individual-market insurance for people with pre-existing condition exclusions.
2. These conditions include: heart disease, diabetes, arthritis, cancer, stroke, emphysema, hypertension, asthma, bronchitis, liver condition, severe migraines, and anxiety/depression. This definition was used in a recent report by the Urban Institute and University of Maryland at Baltimore County, “Uninsured Americans with Chronic Health Conditions: Key Findings from the National Health Interview Survey.” (Princeton, NJ: The Robert Wood Johnson Foundation, 2005). Percentages were applied to Census Bureau population estimates for 2006.
3. S. Collins et al., “Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Financial Well-Being of American Families” (New York: The Commonwealth Fund, 2006).
4. J. Hadley and J.D. Reschovsky, “Health and the Cost of Non-Group Insurance,” Inquiry, 40 (3) (2003): 235-53..