Health Care in the 2012 Presidential Election: How the Obama and Romney Plans Stack Up

October 2, 2012

Authors: Sara R. Collins, Ph.D., Stuart Guterman, M.A., Rachel Nuzum, M.P.H., Mark A. Zezza, Ph.D., Tracy Garber, M.P.H., and Jennie Smith
Contact: Sara R. Collins, Ph.D., Vice President, Affordable Health Insurance, The Commonwealth Fund, src@cmwf.org

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Candidate Health Plan Comparision

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Overview

With President Obama and Governor Romney offering fundamentally different visions for the nation’s health system, this fall’s presidential election provides a stark choice for U.S. voters. To inform public discussion about health care in the election and beyond, this analysis draws from microsimulation analysis to contrast the potential impact of implementing the Affordable Care Act in full with Romney’s proposals to repeal the law, eliminate many of the new requirements for insurance markets, and make changes in Medicaid and Medicare. The report focuses on the following: the number of Americans expected to gain health insurance; changes in the affordability of insurance; changes in consumer protections and consumer choice; help for small businesses; improvement in Medicare solvency; improvement in health care quality; and control of health spending growth. Findings of the analysis indicate that, in each area, implementation of the Affordable Care Act would likely outperform Romney’s proposals.

Executive Summary

ES 1With the U.S. presidential election just five weeks away, health care is in the spotlight. President Obama and Governor Romney have proposed distinctly different approaches to the health care problems currently plaguing the United States: more than 48 million people without health insurance, increases in health care costs and premiums that exceed the growth in family incomes, and uneven quality in health care across the country. If reelected, the president has pledged to continue to implement the Affordable Care Act, the health reform law whose major provisions to expand insurance coverage and improve health care delivery will be rolled out in the next 15 months. In contrast, the Republican nominee has said that, if elected, he will work to repeal the law and replace it with his own vision for U.S. health care. Health Care in the 2012 Presidential Election

To inform public discussion about health care in the presidential election and beyond, this report describes the candidates’ approach, examines key differences in how each would address the current problems affecting the health care system, and evaluates the potential implications of their respective plans on health insurance coverage and out-of-pocket spending. The comparison relies on results of microsimulation analysis of the candidates’ plans conducted by economist Jonathan Gruber.

The Candidates' Approaches to Solving the Nation's Health Care Problems

With each candidate offering fundamentally different visions for the nation’s health care system, this fall’s presidential election provides a stark choice for U.S. voters (Exhibit ES-1). In pledging to fully implement the Affordable Care Act, President Obama supports the goal of near-universal health insurance coverage, by maintaining existing private insurance markets but also instituting tighter and more standardized regulations across the country to ensure a broad choice of comprehensive health plans to all who seek coverage. In addition, federal tax credits would make individually purchased health plans more affordable. The Medicaid program would cover more families with low or moderate incomes.

Governor Romney, on the other hand, has not identified universal coverage as a goal. While also supporting a health insurance system based on existing markets, he believes that more limited regulation will ensure a broad choice of health plans for consumers. Romney would encourage more people to buy health plans in the individual market by making the tax treatment of individually purchased coverage similar to that now accorded to employer-based plans. By reducing federal funding to Medicaid, through a proposed system of state block grants, and loosening federal requirements, his administration would substantially scale back the federal–state public insurance program for people with low incomes.

To contain growth in health care costs and improve the quality of care, Obama supports the health law’s reforms targeting both how insurance markets operate and how providers are paid and care is delivered. Romney would seek to drive down health care costs by providing fixed budgets and looser standards to state Medicaid programs, on the theory that doing so will allow states to innovate and save money. On Medicare, Romney would introduce competition between private plans and traditional Medicare by providing beneficiaries with “premium support” to buy the plan they choose. He would also place limits on annual spending, starting in 2023, if such competition fails to bring down costs.

Comparing the Candidates' Plans for Health Care

To examine how the Obama and Romney health plans stack up, this analysis asks seven key questions:

  • Will the plans increase the number of Americans with health insurance?
  • Will the plans make health insurance more affordable?
  • Will the plans protect consumers?
  • Will the plans improve consumer choice?
  • Will the plans help small businesses?
  • Will the plans improve Medicare?
  • Will the plans improve health care quality and slow health care spending growth?