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Presidential Candidates' Health Care Advisors Face Off on Plans' Cost, Coverage

By Reed Cooley, CQ Staff

April 25, 2008 -- Which comes first, cost or coverage? Health care advisors representing the Clinton, McCain, and Obama campaigns all offered different approaches at a recent National Federation of Independent Business forum.

Doug Holtz-Eakin, policy advisor for the McCain campaign, expressed concern that while a comprehensive effort to extend insurance coverage to all Americans would pump more money into the system and spread risk, it would only delay the problems of failing to address the issue of cost.

"Rising spending on health care has been the biggest threat to the system . . . . It is the reason we find employers dropping coverage," he said at Thursday's event.

But the Clinton and Obama camps seem more focused on the coverage angle. "It's really hard to get a handle on cost without addressing coverage," said Katherine Hayes of Clinton's campaign.

Obama advisor Kavita Patel agreed. "Our plans are very similar," she said, introducing another of the forum's themes—the many parallels between the health care proposals of the two remaining Democratic hopefuls.

Both senators have highlighted the need for choice, that if you like what you have you keep it, even in the new system; both have emphasized the importance of comparative effectiveness and quality measures; and both would support some form of a mandate to ensure that all Americans are insured, although the nature of the mandate is the root of the major difference between the plans.

Clinton would require all individuals not covered by federal or employer programs to purchase health insurance to prevent people who can afford insurance from opting out and distorting premium levels.

"You can't open up the door [to tell] insurance companies that they have to take everybody . . . if some people can wait until they're sick to enter the health care system," said Hayes.

Obama would extend the mandate to employers, giving individuals the choice of whether or not to buy a private plan. Clinton's plan also includes an employer mandate, but with an exemption for small businesses. She has not specified what will constitute a small business, or at what level of income federal programs will kick in for individuals.

Hayes believes the New York senator has intentionally left out these details in order that they might be part of the debate after the election. "There's not a desire to be intentionally vague," she said.

The lynchpin of the McCain plan, on the other hand, has been a tax credit of up to $5,000 for all Americans covered by a private insurance plan whether individually or through their employer.

According to Holtz-Eakin this both allows for easier individual access and covers the $4,200 average tax liability for employer-based coverage.

The widest discrepancies at Thursday's meeting over what each plan would cost.

Clinton has estimated that her plan will cost $110 billion a year, to be paid for by savings from system modernization, bringing all eligible beneficiaries into Medicaid and Medicare, and rolling back the Bush tax cuts for individuals with incomes greater than $250,000 a year.

Obama's plan will cost $50–60 billion a year, and McCain's tax credit plan is budget neutral, according to their respective advisors.

"I don't think anyone has done an independent estimate," said Hayes.

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