As you head to the voting booth on Tuesday, Nov. 4th, can you confidently say that you are familiar with, and understand, both candidates’ health care plans?
While the candidates did briefly mention their health plans during the three presidential debates, they left out many important details about their proposals that might help voters to make a more informed decision.
We realize that there is only so much time during a debate (or a television commercial) to discuss all of the details.
But we also know that voters of all stripes want more information about the candidates’ health care plans.
- A recent Kaiser Family Foundation poll found that one in four independents (26%) ranks health care as one of the top issues they would most like to hear the candidates discuss.
- Amongst voters overall, health care ranks third, behind the economy and Iraq, as an issue of major importance.
And the two plans have fundamental differences that everyone should be aware of.
That’s why we’ve decided to do our own in-depth comparison of the two plans.
Here are the stated goals of the two plans.
|Senator John McCain||Senator Barack Obama|
|Date Plan Introduced||October 11, 2007||May 29, 2007|
Source: Kaiser Family Foundation, 2008 Side-by-Side Summary
While these stated goals do not provide much information, they give us some insight into 1) the focus of the two candidates and 2) their beliefs about whether access to health care should be a right or a responsibility.
- First, the main focus of both candidates is reforming insurance options as a way to improve the overall system.
- Question: In focusing on insurance coverage, will the two candidates address the other complex issues facing our health care system?
- As we showed in this article, universal access to insurance will not necessarily make health care more affordable.
- This is because medical costs are continuing to spiral upwards, independent of whether people have insurance or not. This leads to higher insurance premiums for everyone and greater government spending on health care.
- Finally, increasing access to insurance does not guarantee that folks can even see a primary care doctor, as the primary care workforce is dwindling.
- Second, the language used by the two campaigns tells us how the candidates view access to health care and insurance.
- At the end of the second debate, the candidates were asked whether health care is a right or a responsibility.
- Senator Obama responded that health care is a right and his goal of making high-quality coverage affordable through a mixture of programs reflects this belief.
- Senator McCain responded that health care is a responsibility and his emphasis on reforming insurance options to cater to “individual” and “personal” needs reflects his answer.
How will the candidates expand insurance coverage and what will the results be?
|Senator McCain||Senator Obama|
|Overall approach to expanding access to coverage||
Source: Kaiser Family Foundation, 2008 Side-by-Side Summary
Reforming access to insurance coverage is the central focus of both of the candidates’ health plans.
- Both candidates maintain a role for private insurers in their plans.
- At the same time, the plans have fundamental differences when it comes to the day-to-day operation of the system.
Currently, the majority of Americans under the age of 65 receive insurance from their employer. That’s because the premium contributions from employers are not treated as taxable income to employees. This provision in the tax code encourages employers to provide insurance.
This “majority” with employer-based coverage is declining rapidly.
- In 2008, only 53% of individuals received coverage from their employers, down from 64.2% in 2000.
- Even with the tax break on premium contributions, employers, especially small businesses, are not able to keep up with rising premium costs.
This means that the number of uninsured individuals is growing. More pressure is being put on public programs such as Medicaid and SCHIP as a result.
Given our current insurance situation, the two candidates propose radically different solutions.
Under the McCain plan:
- Employer-sponsored premium payments would be subject to income taxes.
- Individuals would be given a $2,500 tax credit and families would receive $5,000 to help pay for premiums from employer-based coverage or from private insurance plans.
- Any remaining money from the credits could be deposited in Health Savings Accounts (HSAs).
- As we showed in this article, HSAs can either be deposited in a bank or invested in stocks, bonds and mutual funds. HSAs typically benefit healthy, higher-income individuals and families.
- Insurance policies could be sold across state lines.
- The states and the federal government would work together to form a Guaranteed Access Plan for individuals who are denied coverage due to existing conditions.
- Premiums in the plan would be limited and financial assistance would be available for low-income individuals.
Under the Obama plan:
- Small businesses, self-employed individuals and those without coverage from their employers would be able to purchase insurance through a new, regulated insurance market called the National Health Insurance Exchange.
- Through the exchange, people could choose a private plan or a new public plan with benefits similar to those offered to members of Congress.
- All insurance carriers within the Exchange would be required to offer their plans to all applicants and could not charge premiums based on health status.
- Employers would be required to offer health benefits or contribute to the cost of the new public program (small businesses would be exempt).
- All children would be required to have health insurance.
- The Medicaid and SCHIP programs would be expanded to help meet this requirement.
- Individuals would be eligible for income-based premium subsidies.
These two health plans would change our current system a great deal.
Critics of McCain’s plan argue that:
- It would essentially end employer-based coverage.
- At the same time, the tax credits offered to individuals and families would not be sufficient to pay for the average annual premiums of private plans.
- For example, the tax credit for families is $5,000 but the cost of employer-sponsored family coverage averages $12,680.
- As a result of the plan, the total number of uninsured Americans might decline marginally, while
- higher income, healthier Americans would benefit, because the tax credit would supplement their existing income when paying for an insurance policy, while
- lower income Americans and those with existing conditions would be hardest hit by this plan, as they might lose their employer-sponsored coverage, and be unable to pay the premiums of private insurance even with the credit,
- or they might be turned away by insurers who are not required to cover those with existing conditions.
- Allowing individuals to buy health insurance across state lines would encourage insurance companies to set up shop in states that have fewer insurance regulations.
- This means that the quality of insurance packages could decline, as insurance companies would only be required to include the basic treatments mandated in the least-regulated state. To read about this issue in-depth, go to this blog.
Critics of the Obama plan argue that:
- Requiring businesses to offer insurance or pay into a purchasing pool will result in job loss.
- Low-income Americans will actually have more disposable income to spend as a result of increased health coverage, thus creating jobs.
- Mandating that parents buy insurance for their children will pose an extra burden on working Americans.
- Obama does offer assistance to families to help cover children, by expanding the SCHIP and Medicaid programs.
- There is public support for this idea: Two-thirds of Americans support a mandate requiring parents to purchase insurance for their children, with federal subsidies available for low-income families.
- The plan is too costly for the federal government, especially as the deficit grows and the recession continues.
While it is difficult to predict the outcome of any proposal, this side-by-side analysis from the independent Commonwealth Fund breaks down the key differences between the two candidates on insurance and shows the projected impact that the plans will have on reducing the number of uninsured.
|Senator McCain||Senator Obama|
|Aims to cover everyone||Not a goal||Goal|
|Rules for individual insurance market||Minimum State Rules||Uniform National Rules|
|Employer Role in Providing Health Benefits||Reduce||Expand|
|Families’ Exposure to Health Care Costs||More||Less|
|Requirements to have coverage||None||Children Only|
|Leverage to Stimulate Improvement in Quality and Efficiency||No change||More|
|Uninsured Covered after 10 years||2 million||34 million|
Estimates of uninsured covered from L. Burman, S. Khitatrakan, G. Leiserson, et al. An Updated Analysis of the 2008 Presidential Candidates’ Tax Plans. Urban Institute-Brookings Institution Tax Policy Center Updated September 12, 2008.
Source: Commonwealth Fund, The 2008 Presidential Candidates’ Health Reform Proposals: Choices For America