October 27th, 2008

Sen. Barack Obama and Sen. John McCain differ greatly on how to best reform the healthcare system in America.  The New York Times analysis states:

 ”The candidate’s health positions reflect the wide gulf between Senator John McCain’s devotion to free markets and Sen. Barack Obama’s embrace of a larger government role.  But the campaign also has revealed common ground on priorities like reducing health spending by reconfiguring the Medicare payment.”

In order to fund their plans, both McCain and Obama would have to “acheive significant reductions in the growth of health spending”.  The Times is skeptical that this is possible either econonemetrically or politically, expecially with the dismal state of the current economy.

Fundamentals of Sen. Obama’s plan:

Children and Adults: Obama would require that all children have health insurance, but would not require all adults to buy health insurance for themselves.  Obama believes that the vast majority of people who lack health insurance don’t have it not because they don’t want insurance, but rather because they can’t afford it.  Therefore, he believes the way to fix this problem is by reducing the cost of premiums for the uninsured, not by issuing a government mandate.

Uninsured Adults: To achieve universal coverage, Obama would establish a federal health plan for the uninsured.  The benefits would be comparable to those offered to federal employees.  Obama would offer governement subsidizies to lower the premiums for low income citizens.  He would also expand the eligibility for Medicaid. 

He would not allow insurers to deny coverage to individuals because of age or pre-existing conditions.

In addition, the Obama plan would create a government exchange, which would allow individuals to shop for the new federal public plan and approved private plans. He would allow health plans to be portable when individuals change jobs.

Employers: Obama would require employers to insure all their workers or pay a a payroll tax to help subsidize government coverage for uninsured Americans.  The smallest businesses would be exempt from this payroll tax.  Obama’s plan would reimburse all employers for “catastropihic health costs”. 

He would create a new Small Business helath Tax Credit to help small businesses provide affordable health insurance to their employees.

Controlling Costs: Obama would make a $50 billion government investment in health information technology over five years.  These advancements will streamline costs and eliminate many medical errors.  Obama says he would prevent insurers from overcharging physicians for their malpractice insurance, and would challenge drug companies that block cheaper generics from entering the market.  He supports allowing safe importation of cheaper medicines from developed countries.

How would Obama pay for additional costs in his plan?

The majority of Obama’s health plan would be paid for by increasing income taxes on Americans who make over 250,000 a year.  The rest of the plan would be funded by requring “all but the smallest businesses” to make a  contribution to fund the federal plan for the uninsured.

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Fundamentals of Sen. McCain’s plan:

Adults and Employers:  Sen. McCain will not require anyone to obtain health insurance.  He opposes a government mandate, saying he wants to give individuals freedom to choose their own health care.

Sen. McCain would change the tax treatment of health benefits, saying the change will give all consumers the same advantages, whether they purchase insurance through employers or not.  This change would eliminate the tax deductivility of employer-sponsored health insurance.  McCain would replace this provision with tax credits of 2,500 for individuals and 5,000 per family to purchase their own health insurance.

McCain says that these tax changes will improve competition in the individual market, which in turn will lower prices and ultimately make coverage more affordable for the uninsured. 

He would work to expand the benefits of health savings accounts (HSA’s) for families, which he says allows more important health choices and decisions to be made by families and not by insurance companies.

Like Obama, McCain would make health plans portable from job to job, and would also allow individuals to shop for health plans from other states.

In addtion, McCain’s plan would move to pay medical providers based on the quality of their work.

Uninsured adults: Those adults with pre-existing conditions that have made it hard for them to find private coverage would be covered through a “guaranteed access plan” to be funded by federal money.    With these federal funds, states would set up high-risk pools that would contract insurers to cover those individuals who have been rejected on the open insurance market.

Controlling Costs:  McCain would seek to control costs by investing federal dollars in prevention and chronic disease management,  increasing health care information technology, limiting malpractice damages through tort reform, and allowing generic drugs to be introduced more quickly. 

He supports the safe importation of cheaper drugs from developed nations, and says he wants to make health care more accessible and affordable by offering more federally funded free health clinics for the unsiured.

How would McCain pay for additional costs in his plan?

McCain has not stated any specifics in funding for his plan, but has said that universal heatlh care is possible without a rax increase. 

**To learn more, please visit Obama and McCain’s healthcare pages on their capaign websites.**