If elected president, John McCain and Barack Obama would adopt vastly different approaches to extending health insurance coverage to more Americans, and the two plans would yield very different results, according to a Commonwealth Fund report. The analysis finds that these differences would affect not only how many people would be covered, but also how well families would be protected against high health care costs.
As reported in The 2008 Presidential Candidates' Health Reform Proposals: Choices for America, Senator McCain's proposal would ultimately move many people out of the current system of employer-based coverage and instead encourage them to select coverage on their own through the individual insurance market. Senator Obama, meanwhile, would strengthen employer-based coverage and public programs and create a new “group insurance exchange,” largely replacing the individual insurance market in the process. Both candidates offer strategies to improve the quality and efficiency of health care, such as by expanding the use of health information technology, evaluating the comparative effectiveness of medical treatments, and changing the way providers are paid.
Individual vs. Group Insurance
The individual insurance market would play an expanded role in McCain's plan. His proposed tax code changes would encourage more people to purchase their own coverage and would let them buy insurance from companies in other states. While it would expand choices for healthy people, allowing purchases across state lines would eventually lead to the removal of consumer protections currently in place in some states—potentially reducing access for older people and those with health problems. McCain has proposed to cover people with preexisting conditions through an expansion of state high-risk pools.
Obama proposes a National Health Insurance Exchange where small businesses, self-employed individuals, and people without coverage could purchase a private or public plan similar to the one covering members of Congress and federal employees. Small businesses would be eligible for tax credits to offset premium costs, and affordability for families would be guaranteed through premium assistance on a sliding scale based on income. Insurers throughout the health care system could not reject applicants or charge higher premiums because of preexisting conditions or other health risks.
"Senator Obama is proposing to build on the broadest risk pools in the system, strengthening large employer-sponsored coverage and expanding Medicaid and the State Children's Health Insurance Program, while fixing the individual insurance market with consumer protections, benefit standards, and income-related premium assistance," said Sara Collins, lead author of the report and assistant vice president at The Commonwealth Fund. "Senator McCain's plan would ultimately shift coverage away from employers to the individual market, letting people make their own insurance choices but potentially making coverage unaffordable or unavailable for those who are older or who have serious health risks."
Coverage and Quality
The candidates' proposals differ widely in their potential impact on the uninsured. Researchers at the Urban Institute/Brookings Institution Tax Policy Center have estimated that Senator McCain's plan would reduce the number of uninsured by 2 million out of a projected 67 million in 10 years, compared with 34 million uninsured covered in 10 years under Senator Obama's plan.
The Urban/Brookings Tax Policy Center estimates that the McCain plan will cost the federal budget $185 billion and the Obama plan $86 billion in the first year. Over 10 years, McCain's plan would cost $1.3 trillion and Obama's plan $1.6 trillion.
The Bottom Line
Senator Obama's plan shows greater potential for making care more affordable, more accessible, more efficient, and higher-quality, though it will likely fall short of covering everyone, the analysis concludes. While Senator McCain's plan also aims to improve the quality and efficiency of health care, its reliance on an unregulated individual insurance market is, by itself, unlikely to achieve universal coverage and will likely increase spending on insurance administration; state high-risk pools for those denied coverage in the individual market would be particularly expensive.
"In the current economic crisis, more families are concerned about losing jobs and health insurance coverage," says Commonwealth Fund President Karen Davis. "It is even more critical to act now to reform our health system to ensure affordable, efficient, high-quality health care to all Americans."
In addition to the report, the Fund Web site offers an interactive Web feature providing side-by-side comparisons of the Obama and McCain plans in 24 areas.