Anchor Intro: A health-care plan headed for a Wall Street-like disaster. That’s what Democratic presidential candidate Barack Obama says in a recent ad about Republican candidate John McCain’s health care proposal. Reporter Torie Wells explains why the link between deregulating banks and deregulating health care isn’t as tight as Obama suggests.
The Ad:
Title: “Article”
From: Democratic presidential candidate Barack Obama
Type: Attack ad about John McCain’s plan to deregulate health care insurance.
Date: Sept.21, 2008
URL: http://www.youtube.com/watch?v=XWX6d7r-bpk
The attack ad titled, “Article,” from Democratic presidential candidate Barack Obama, links Republican presidential candidate John McCain’s health care proposal to the current Wall Street crisis. It suggests that bank deregulation caused the current crisis and health care deregulation would cause a similar disaster. The ad was posted on youtube.com on September 21, 2008. The ad refers to an article written by McCain about his health care proposal. This article is published in the non-partisan public policy magazine, Contingencies.
What It Says:
Here’s the ad’s transcript:
“We’ve seen what Bush/McCain policies have done to our economy. Now John McCain wants to do the same to our health care. McCain just published an article praising Wall Street deregulation, said he’d reduce oversight of the health insurance industry too, just ‘as we have done over the last decade in banking,’ increasing costs and threatening coverage. ‘A prescription for disaster.’ John McCain, a risk we just can’t afford to take.”
The facts:
Let’s start by looking at McCain’s health care plan. As part of his larger proposal, McCain wants to deregulate the health insurance industry, allowing people to buy coverage in any state. Under the current health care system, states control the regulations on selling insurance coverage. States with more rules prohibit insurance companies from denying coverage or charging a people more because they are sick.
Instead, insurance companies raise the cost of coverage for everyone. It’s the standard practice in which the cost — or the risk of high expense — is spread across a larger pool of the insured. McCain’s plan to deregulate health insurance would allow anyone to buy insurance in any state. That could mean healthier people buying coverage in states with fewer rules. Insuring only the healthy, at lower cost, is called “cherry-picking” and is widely criticized for lowering the cost for some and raising it for the sickest.
Under McCain’s plan, insurance companies in states with fewer regulations could offer smaller, less expensive plans for the healthy. But it could also mean that some states, with more regulations, would end up with more expensive health insurance because only the sick would still be buying in those states.
The Facts:
This ad is misleading in three ways:
First:
- The ad says McCain praises Wall Street deregulation.
- But, McCain never explicitly writes that.
Second:
- The ad pulls the phrase “as we have done over the last decade in banking,” out of a larger sentence.
- The phrase is taken out of context and is only a small part of a larger idea.
- The rest of the sentence reads, “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.”
Third:
It plays into the fear that health care would end in disaster, like the current Wall Street crisis.
Sherry Glied is a health policy professor at Columbia University and the co-author of a recent article published in Health Affairs, a health policy journal. The ad says McCain’s plan would increase costs. Glied says where people buy their coverage could change, but that doesn’t necessarily mean it would cost everyone more.
“Not everyone’s cost will necessarily increase, although, a lot of people who move from employer insurance, to non-group insurance will see their cost increase, but it will mean there will be a lot more variance in the cost that people pay.” (Sherry Glied, health policy professor at Columbia University)
The ad also says coverage would be threatened. Linda Blumberg is a researcher for the Urban Institute. Like Glied, she says costs could change for many people under McCain’s plan. And sicker people could end up paying more. But, she says she doesn’t think McCain’s plan would leave more people uninsured.
“So you end up seeing a much healthier pool of individuals purchasing coverage in deregulated markets and higher-cost people being insured in more regulated markets.” (Linda Blumberg, researcher for Urban Institute)
Blumberg also cited research by the Tax Policy Center that projects almost 5 million more people would be covered under McCain’s plan by 2013.
Now, 47 million Americans lack health insurance.
Conclusions:
This ad makes sweeping statements about McCain’s health care plan and is misleading. It makes a weak link between McCain’s plan and the Wall Street crisis without any facts to support the claim.
Reporting for Democracywise, Torie Wells.
(Torie Wells is a junior broadcast journalism student)
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