September 18th 2008
Obama and McCain’s health plans compared
Both Presidential candidates’ health-care plans come under scrutiny in the Sept 16 issue of Health Affairs, and both are found to have serious flaws.
Right now, people who receive employer-subsidised health insurance do not have to pay taxes on it. In their analysis of John McCain’s proposals, authors Thomas Buchmueller, Sherry A. Glied, Anne Royalty, and Katherine Swartz state that this not only lowers each employee’s tax burden; it also strengthens risk pools by including younger, healthier people who take advantage of the tax break to obtain coverage. Under McCain’s plan, employer-subsidised health insurance would be considered income and become subject to federal income taxes. However, families would receive tax rebates of US $2500 to $5000 to offset the cost of those policies.
On the assumption that, stripped of the tax benefit of employer-based coverage, many people would then buy policies on the open market, the McCain plan would eliminate current restrictions against crossing state lines when shopping for policies. Many states now require insurance companies to cover certain services, such as mammograms, even in their barest-bones policies; under the McCain programme, people in one state could buy a less-expensive policy in another state that required less generous coverage.
All in all, the authors estimate that 20 million of the 160 million Americans now covered through employer health plans would lose that insurance under the McCain plan in its current form. His proposal to deregulate the market ultimately would raise prices for consumers and leave them with fewer protections and more limited coverage.
Obama’s plan is more inclusive but financially unsustainable, write Joseph Antos, Gail Wilensky (an unpaid advisor to the McCain campaign), and Hans Kuttner. People with employer-sponsored coverage could keep it, while others could choose either a government-subsidised National Health Plan (NHP) or a private plan offered through a national Health Insurance Exchange. All of these policies would be required to offer, at a minimum, benefits similar to those that federal employees now enjoy. The authors warn that such heavy regulation would “drive up insurance costs or distort insurance choices”. Other features of the Obama plan, such as having employers who do not offer insurance contribute to the NHP, or requiring parents to obtain coverage for their children, ultimately would come from the consumer’s pocket, in the form of lower wages, higher taxes, or both. Government subsidies would offset some of these costs. Still, according to one analysis, federal outlays under this plan would increase by about $1.1 trillion over ten years.
Meanwhile, the Census Bureau reported in August that the number of uninsured Americans actually declined, from 47 million in 2006 to 45.7 million in 2007. The reason: a growth in coverage through Medicaid, the federal insurance programme for the very poor. Thus, it seems that the USA may be inching toward government-sponsored health insurance after all.
Norra MacReady
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