McCain's Healthcare "Cost Cutting" May Have Unintended Cost Nightmare Attached To It

I was just doing some research on John McCains's healthcare proposals and I came across something which I think is VERY important. Right now, there are very few international companies in the US healthcare market, which is apparently good.. for the reasons explained in the following..

Obviously, trade agreements are a mixed bag. However, they can have hidden gotchas, which often, few of us understand. However, we would expect Presidential candidates to know far more than average citizens about these agreements. Which is why the following is -perhaps- surprising!?

John McCain wants - under the guise of saving us money, wants us to create a "national health care market" that would "facilitate entry of more foreign health care providers" into the US market. Well, there could be a huge hidden cost to that. It could pre-empt alternative methods of cutting costs, ones which have been proposed by both Obama and McCain. For example:

McCain Proposal for National Health Care Market Would Raise Cost of Removing U.S. Health Care from WTO Jurisdiction

McCain has proposed the development of a "national health care market" that would facilitate entry of
more foreign health care providers and thus make it far more costly for the United States to withdraw
the health care sector from WTO jurisdiction. While McCain has provided few details about the
proposal, implementing a real national insurance market would inherently require greatly reducing the
role of states, for instance with the federal government taking control of licensing and standards now
under state authority.
Pre-empting the authority of U.S. states in this area is a key demand of foreign insurance companies in
the context of the WTO's Doha Round of negotiations.42 European and other foreign insurance firms
have long considered U.S. state-level regulation of the insurance market to be a market access barrier
because it requires that they must obtain licenses in each of the 50 states in order to provide insurance
services on a national basis.43 Since the insurance sector and health services are already covered under
the GATS, new federal law that would preempt such existing state authority would facilitate the entry
of foreign service-providers into the U.S. market. " read closely...

"Once the flood gates are open and many foreign
health insurance and health service providers are in the U.S. market, it would be significantly more
costly for future administrations to remove the health care sector from WTO coverage, as all WTO
nations with firms in the U.S. market or with an interest in the market would have to be compensated
under WTO rules.44
Unless U.S. health care services are withdrawn from coverage under various trade rules, federal
and state governments' future abilities to effectively regulate the delivery of health care services,
implement health care reform measures designed to expand access, and reduce the cost of health
care could be stymied. Because the United States must provide compensation under WTO rules
before removing U.S. health care policy from WTO jurisdiction, quick action to do so will be
much less costly, before more foreign insurance and health care providers enter the U.S. market."

That was taken from a report on the chilling impact of our existing trade agreements on the promises made by the nominees that came out a few months ago..

Presidential Candidates' Key Proposals on Health Care and Climate Will Require WTO Modifications

In this case, eliminating state regs and thereby encouraging foreign companies to enter the US health insurance market, could cause an presumptively unintended permanent lock-in! One that would be very expensive to leave- very expensive!

Tags: Doha Round, GATS, Health Insurance Risk Pooling Mechanisms, market access barriers of concern, National Health Insurance Exchange, restrictions on market access, WTO, WTO tribunals (all tags)



Re: McCain's Healthcare

I know you know healthcare...That being said whose plan is better McCain's or Obama's?  

by hootie4170 2008-06-07 06:54PM | 0 recs
Re: McCain's Healthcare

Im sure thats Obama; but even then his plan is lackluster and leaves a huge loophole for so called cost management.

Obamas plan calls for mandates for 25 and youngers. doesnt require those who do not want it to need it, while making a fund for catastrphic illness.what I understood from CNN is that people paying into the system would reep the benefits, healthy or unhealthy individuals, from the system but when some one who hasn't been paying into gets sick, those who have been paying into the system have to pay for the slackers who didnt want health insurance in the first place.

[its has a major flaw; but is still a step up from McCain's]

Am I understanding this right, architek?

by alyssa chaos 2008-06-07 07:51PM | 0 recs
Actually, I don't think Obama's plan would be

implemented. I'm sure you have all read my posts on adverse selection. Thats a serious problem, but this WTO issue would have to be satisfied BEFORE the US government gets into the insurance business and competes with private companies. They would sue us in WTO-court.

If you read the report, you will see that this problem CAn be addressed, though, I think its highly presumptive that the people who make these decisions would put our interests over the interests of the other stakeholders. Presumably, they have contributed extensively to political candidates and obviously, they are WELL ahead of us in thinking this through.

They and their friends have been anticipating these kinds of things for decades as shown by McCain's 'innocent' proposals.

And, to some extent, I think, Obama's as well.


The best thing we can do to turn this into something that will help rather than hurt Democrats is to get this issue out in the open where it can get debated. I think this particular aspect of McCain's plan really needs to be spotlighted because it shows just how innocent politicians can be in these matters. (or not.)

Let the people make up their minds for themselves as to whether this kind of thing is intentional or not.

If the Democrats pretend that this issue doesnt exist and that it wont delay any solutions on healthcare then in my mind we are almost as bad as the Republicans and that kind of error is the kid of 'fatal error' that campaigns often n retrospect see as having cost them elections.

Again, we need the Dems, particularly the Obama campaign to start treating people as adults and giving us a reason to be enthusiastic supporters rather than simply aware of the candidate.

by architek 2008-06-07 08:08PM | 0 recs
Some states already have 'high risk' pools

They are often hard to get into, because the people who join them are people with chronic illnesses and they are not able to buy private insurance.

The stes literally force the insurance companies to offer the pols as a condition of doing business in their states.. (something McCain wants to outlaw, it appears.)

And they are very expensive.. most working people can't afford to buy them.. so if you are chronically ill and under 65, and have lost your job because you are sick.. missed too many days, can't work..YOU ARE OUT OF LUCK..

That doesn't seem to be something Obama really cares about or he would have addressed the doubts people like me had long ago. Instead they have been silent but word has leaked out throgh many different channels (like the Goldsbee quote in WSJ) that they dont see covering about 1/5 of Americans as being possible because they are too expensive. That is the same percentage that the Cooper Plan in 1994 found could not be covered.. I don't know the current status of TennCare but I know that not long ago they were talking about dropping the uninsurables because of cost. That was the low income folk (a lot of the people with serious illnesses are low income- it comes with the territory..)

People who lose insurance who have chronic illnesses, even ones which are completely treatabe with drugs, often lose everything. Its amazing how expensive prescription drugs are when you consider their cost of manufacturing is often very low. Even many older, generic drugs can be very expensive. people who dont have insurance pay more too.

Insurance companies negotiate sweetheart deals that people cant get.

There are so many problems, where do you start. Add this WTO one to the list. If you Google some of the phrases in the tags you'll find out more than you would ever want to know about these newly recognized WTO-related issues.

They are not small ones. They will definitely also stand in the way of things like Obama's alternative health plan (crucial to a great many of his campaign promises)

Look, I wanted this diary to focus on the McCain issue because it would pre-empt, permanantly, things like the other proposals that all three (now two) candidates brought up. You can read the report yourselves. I have been told that I need to take a break from this and its true. I do. I have been getting extremely anxious about this issue and its effecting my health negatively. So I will try not to discuss this too much.

I am wondering, though, where the light at the end of the tunnel is.

by architek 2008-06-07 08:28PM | 0 recs


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