For a while, Minnesotans didn’t hear much from the presidential campaigns, but a series of polls showing a tight race here has forced both campaigns to spend money here.  During the football games yesterday, I saw a few spots from both campaigns, and one Obama ad appears in tight rotation in this market.  It follows up on Joe Biden’s attack on John McCain’s health-care plans, and repeats the same arguments that CNN’s Political Ticker called “misleading”:

The figure Obama provided, $12,680, comes from a study published last month in the journal Health Affairs. That study found that “average annual premiums in 2008 are $4,704 for single coverage and $12,680 for family coverage.” But that same study reported the average cost people pay for employer-provided health care coverage is $721 for singles and $3,354 for family coverage. The rest is covered by the employer.

Those figures back up a conclusion from the nonpartisan Tax Policy Center: that McCain’s health plan, offering a tax credit of $2,500 per individual and $5,000 per family, would be a net tax cut initially for many. As the CNN Truth Squad has previously reported, the center calls McCain’s health care plan a tax cut for virtually all Americans through 2013 and for the middle-class through 2018, which is as far as the center has projected. But the center says long-term, some of those benefits might erode if the tax credit did not keep up with costs of health care.

Obama, at his campaign stop, cited studies that suggest millions of Americans may lose their employer-provided health insurance under McCain’s health plan. A study published in Health Affairs in September did estimate that 20 million people may lose employer-based coverage and take on other insurance coverage, and that plans would likely be “less generous.” McCain says his plan would give people more options, increase competition, and lower costs. Which side is right is a matter of opinion and difficult to predict.

Either way, Obama left out critical context. The $12,680 figure is the average total cost under current health care laws, when a large majority of insured Americans have plans through their employers. Employer contributions often lead employees to choose higher cost health plans than the would on their own, which in turn raises the average premium nationwide. And we can’t know exactly how costs would change, in either direction, under McCain’s plan.

Obama’s ad says that he will reform the health-care industry by attacking insurers.  That makes for great populist sentiment, but lousy policy, even with people who have routine frustrations with their health insurers — and believe me, I’m one of them.  Insurers are nothing more or less than risk pools, and government has already heavily regulated it, increasing both costs and risks.  Part of the reason for this is that a lack of competition, intra-state and inter-state, makes for restricted choices, and the near-lock on the employer-provided model contributes to this.

McCain wants to reform this model by applying two different actions at the same time to unlock health-care offerings.  He wants to give a large tax credit to encourage people to purchase health insurance on their own rather through their employers and allowing insurers to operate across state lines to offer plans.  In order to fund this, McCain proposes to tax employer-offered plans.  That makes the plan revenue neutral, but for the vast majority of American taxpayers, it will actually reduce taxes — and allow self-employed people to get their own insurance.  That will make it easier for people to take risks and start new businesses or to work for themselves, which will create new demand for labor in the jobs they leave.

Will this work?  It does have a risk of employers ending their health-care benefits, although not as large a risk as Obama implies.  Employers offer benefits to attract better employees, and that pressure won’t change with this plan.  It may encourage employers to offer more basic plans, but most employers offer a range of plans already.  Employees often choose the most expensive plans, and often unnecessarily, because they only see a fraction of the real cost.

The McCain plan would force people to see the real cost of health-care plans and purchase more realistic coverage.  That would lower the overall risk for the insurers and allow them to contain costs a little better, keeping premiums lower and expanding coverage to more people.  It treats people like adults and uses the private sector to best advantage, rather than layering on another level of government mandates that distort the marketplace.  The ability to move from plan to plan without the restricting filter of an employer benefit package should also make insurers more competitive and therefore more responsive.

Will it work?  We can certainly debate that, but that’s not the debate Barack Obama and Joe Biden want.  They would rather frighten people away from a fundamental reform of the structure of health insurance for their own purposes.