The good, the bad, the ugly of McKenna's health care plan

Plan engages consumers well, but falters on being a short-term measure with sloppy arithmetic.
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U.S Public Health Service

Plan engages consumers well, but falters on being a short-term measure with sloppy arithmetic.

The race for governor continues to be close as Sept. 14 saw the release of the latest Elway poll, which put Jay Inslee up over Rob McKenna by 3 points, or within the margin for error.

Looking ahead to the final six weeks of the campaign, one of the few issues with the potential to fundamentally change the dynamics of this race down the stretch is health care.

Don’t believe me? Just look at the role health care has had so far in shaping this campaign  —  in an election otherwise about jobs and education.

Health care became a factor in many ways in this race when McKenna joined the lawsuit appealing the Affordable Care Act (ACA).  Given Inslee’s leadership in passing the ACA in Congress, this staked out health care as a wedge issue in the gubernatorial campaign. 

Health care again became a lead issue in this race when, in June, the Supreme Court largely upheld the ACA.  It was the talk of the summer.

Finally, just when everyone thought health care was off the radar screen, Mitt Romney’s selection of Rep. Paul Ryan as his running mate again put health care back in the mix nationally. 

Thus is the context of the recent release by the McKenna campaign of its health care policy platform

As someone who makes a living working on health policy and system reform and is focused on solutions rather than sound bites, this document reminds me of Clint Eastwood —  taken altogether, it has some good, some bad, and some ugly.

First, the good.

As McKenna has campaigned all year, this document calls for a “realignment of incentives for providers” by moving away from a traditional fee-for-service system in health care, where every visit to a provider is a separate charge, toward more managed care and its emphasis on prevention. McKenna is correct when he notes — unlike perhaps a generation ago  —  that there is “broad consensus” around moving in this direction. This principle is perhaps one of the foundational elements of McKenna’s vision for Washington State health care and one I think makes a lot of sense.

Another central element to his vision is engaging and empowering consumers. Typically, this means asking consumers to more actively engage in managing their health by bearing more of the costs of their care and enjoying more of the savings, depending on one’s health care utilization.

While McKenna’s call for “pairing high-deductible insurance plans with health savings accounts” has long been advocated by the market-oriented right, the more general notion of empowerment of consumers in their health choices has become more broadly embraced by folks across the spectrum.

McKenna’s platform also lists addressing “defensive medicine” (the idea that doctors prescribe more care in order to avoid litigation rather than what’s best for patient health) and successfully implementing a health benefit exchange. Both of these points have general support among the public and the health care community, though strong differences of opinion emerge around the details.

In sum, there are some important, smart elements in this plan that can be embraced widely.

But, then there is the bad — as defined by policy statements that don’t appear to make sense when placed in a broader context.

For instance, McKenna’s call to move patients towards consumer-directed health plans might make sense — but only until 2014.  That’s when the health benefit exchange will be operational and will limit insurance plans to four actuarially defined bands of benefit packages — all of which are significantly richer in their service offerings than a consumer-directed health plan.

Now, the Health Benefit Exchange will also offer “catastrophic health plans” — the kind of health insurance that only covers catastrophes. So, it’s possible that this is what McKenna is referring to — broadly moving Washingtonians to catastrophic coverage. 

But, honestly, with federal subsidies available to folks making up to 400 percent of the federal poverty level ($92,200 for a family of four) to buy health insurance on the Exchange, I can’t imagine that a key element of McKenna’s reform plan is to ask these Washington citizens to forego that federal support in 2014 to opt instead for catastrophic coverage only. However, the flip side is also hard to imagine — that after a full campaign, McKenna’s plan calls for a strategy that can only be employed in 2013 and is moot thereafter. This strikes me as having not been very well thought out.

When it comes to the central question of whether to expand Medicaid or not, allowed under the Supreme Court’s affirmation of the ACA, McKenna appears to fall in line with Republican governors from states like Texas, South Carolina and Louisiana in rejecting that alternative. 

Many Republican governors, after reflecting about what’s in the best interests of their state, have decided against expanding Medicaid as as intrusion by the federal government. That is a reasonable policy position on ideological grounds, and something about which good folks can amicably disagree. That’s not exactly McKenna’s position, however. Instead he says, when referring to Medicaid reform, that “we simply cannot afford to replace private investments consisting of employer and employee premium contributions with new entitlement spending.”

This line of reasoning, sadly, doesn't hold up. 

First, not only can Washington State afford it but, according to the Urban Institute, Washington state will save almost a billion dollars by fully implementing the ACA and expanding Medicaid.  Even former state Sen. Dino Rossi, in the very document used to support McKenna’s assertion, acknowledges at one point that Medicaid expansion will have a “direct cost relatively small to the state.”

Second, the “private investments” referred to by McKenna generally aren’t being made in the first place. We’re talking about covering folks who aren’t receiving any medical insurance. And, if these low-income folks have employer coverage of some sort, the switch to Medicaid would help small businesses to redirect money previously spent on health insurance to hiring more employees.

Finally, to the point of “new entitlement spending,” we should all be clear on this basic point. Washington state will send tax dollars to Washington, D.C., whether we expand Medicaid here or not. The only question is whether we will get any of those tax dollars back.  If we don’t expand Medicaid — like Texas, Louisiana, and South Carolina — our tax dollars will go to states that do, such as Oregon, Massachusetts, and California.

This brings us to the ugly part of this platform. McKenna's arithmetic looks sloppy.

McKenna continues to make the claim that “With the addition of almost half a million new Medicaid-eligible adults nearly 1 in 3 state residents would be eligible for the program in 2014.”  While this might be good rhetoric, it’s simply factually untrue.

First, the number McKenna frequently cites of new Medicaid enrollees — in three different places in his platform — is 328,000.  You’d have to add another 50 percent to get to the half-million mark.

Second, the reference he uses to support the claim is again the document produced by Rossi on Aug. 23.  There, Rossi states that if you take all of the Medicaid population (he even generously throws in the additional Washingtonians from the Basic Health Plan that are not otherwise referenced by McKenna) you get 1.2 million residents. Add the 328,000 and you’re at over 1.5 million residents total with both Medicaid and the Basic Health Plan combined.

Again, you’d have to add about 50 percent to that 1.5 million to get to the “1 in 3 residents” of our state’s 6.8 million population.

The writer has appeared as a surrogate for the Inslee campaign in health discussions.

When we’re talking about running the state, being off by a factor of 50 percent to cloak a reasonable ideological position in a false application of quantitative analysis is probably not what we want out of a policy paper.

I believe Rob McKenna is the smartest, most able gubernatorial candidate the Republican Party has fielded in a generation. This health care platform does not support that claim.

Disclosure: The writer has appeared as a surrogate for the Inslee campaign in health care discussions and discussed the campaign's position on health care issues with staff members.


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