The Wonk Room

Industry Questions McCain’s Plan: Proposes Regional Purchasing Pools, Not Individual Markets

The Wonk Room has previously written that Sen. McCain’s plan to have families purchase health insurance on their own in the individual market will leave us without protection from the power of large health insurance companies. Instead of bringing families together through employers, McCain’s radical approach would have families seek coverage by themselves. Jane Bryant Quinn’s piece in Sunday’s Washington Post offers the latest support for the Wonk Room’s position.

While not addressing the McCain plan directly, Quinn talks about health policy perspectives from ERIC, The ERISA Industry Committee. (ERISA is a federal law that helps governs how employers offer employee benefits, like health care.) With a membership of 110 companies that reads like a who’s who of American business, including Boeing, 3M, Lockheed Martin, and Exxon, ERIC proclaims itself as the, “organization dedicated exclusively to representing the employee benefits and compensation interests of America’s major employers.”

Quinn discusses ERIC’s concept to build regional purchasing pools so that employers can band together in negotiating with insurance companies. The reason?

“On their own, ‘even large companies don’t have much negotiating power when facing large health plans,’ said ERIC President Mark Ugoretz.”

The largest companies in the world are trying to find ways to band together as purchasers, while McCain wants the country to move in the opposite direction and leave families on their own to buy coverage. If Boeing, 3M, Lockheed Martin and Exxon all feel like they can’t successfully take on the insurance industry by themselves, what is an individual family supposed to do?

Progressives are trying to find ways to bring purchasers together to buy health insurance so that there is a fair and equitable marketplace. In fact, the purchasing pool idea isn’t new at all, as asserted by Quinn. A year and a half ago, John Edwards’ health plan would have let businesses purchase coverage through his regional purchasing pool model. Sen. Obama wants to create a “connector” to allow individuals to come together to purchase coverage, like the Massachusetts plan. In contrast, McCain would leave families to fend for themselves to hope for the best against health insurers.