How much will each of the plans cost?
|Senator McCain||Senator Obama|
|Estimated Cost of Plan by Campaign (yearly)||
|Estimated Cost of Plan by Non-Partisan Tax Policy Center Over 10-year Period||
Source: Kaiser Family Foundation, 2008 Side-by-Side Summary
These numbers predict that the Obama plan will exceed the cost of the McCain plan over a 10-year period by about $300 billion.
When discussing the total cost, or even the number of individuals who will gain insurance under the plans, economists and policy wonks alike tend to present their numbers based on their own personal belief systems.
While doing our best to make a side-by-side comparison of the two plans, we need to add a very important caveat that all voters should consider before the election.
Even before the financial crisis, political commentators argued that neither plan had a chance of being passed by Congress in the near future. Why?
- A Democratic Congress is highly unlikely to pass McCain’s plan that eliminates the deductibility of employer-based health insurance, and sends millions of workers to the less regulated insurance market.
- A Democratic Congress is also highly unlikely to pass Obama’s plan, with an estimated cost of $100 billion in the first year, given the looming $500 billion deficit.
After the economic crisis, and the $700 billion bailout package, the chance for wide-scale reform may be even less likely.
That said, we don’t think that the economic recession should be used as an excuse not to propose meaningful policy reforms.
Instead, reforms will have to be put into place gradually and then be expanded over time.
There is also the possibility of legislating structural reforms, such as improving insurance access for patients with pre-existing conditions, that will not cost money (and may even start to save money).
What will the outcome of the two plans be?
As we head to the polls on Nov. 4th, we have to ask which one of the plans will be more effective in achieving the stated goals of insurance accessibility, increased efficiency, improved quality and reduced costs.
On the one hand, we have Senator McCain’s plan. McCain views market-based initiatives, deregulation and individual agency as the solutions for system-wide reform.
On the other hand, we have Senator Obama’s plan. Obama argues for a stronger government role in assisting the uninsured and in regulating the private insurance market.
The independent Commonwealth Fund put together the following chart to evaluate the two plans on a number of indicators related to the four areas of accessibility, efficiency, quality and costs, both for individuals and overall.
You can see for yourself which plan would do a better job of achieving the stated goals.
Thank you for reading and happy voting!
|Principles of Reform||Senator McCain
Tax Credits and Minimum State Rules for Individual Insurance Market
Mixed Private-Public Group Insurance with Premium Subsidies and Consumer Protections
|Standard Benefit Floor||–||+|
|Premium/Deductible/Out-of-Pocket Costs Affordable Relative to Income||–||+|
|Easy, Seamless Enrollment||0||+|
|Pool Health Care Risks Broadly||–||+|
|Minimize Dislocation, Ability to Keep Current Coverage||+||++|
|Improve Health Care Quality and Efficiency||0||+|
0= Minimal or no change from the current system; – = Worse than the current system; + = Better than the current system; ++= Much better than the current system
Source: S.R. Collins, C. Schoen, K. Davis et al. A Roadmap to Health Insurance for All: Principles for Reform. (New York: The Commonwealth Fund Commission on a High Performance Health System, Oct. 2007)
This article was written by Julia Nagle.