The war of words between the US presidential candidates heated up in the last week before the election with Barack Obama taking aim at John McCain’s health-care plan. “The truth is, John McCain’s health care plan is radical, it’s unaffordable, and it’s not the change we need right now”, Obama said Oct 29 at James Madison University in Virginia.He praised McCain’s top economic advisor, Douglas Holtz-Eakin, for offering “a stunning bit of straight talk–an October surprise” in his assessment of McCain’s plan to CNN. Holtz-Eakin said younger, healthier workers would not abandon their employer sponsored health plans to take up tax credits offered under McCain’s proposal. “Why would they leave?” Holtz-Eakin said “What they are getting from their employer is way better than what they could get with the credit.”

Obama said the remark confirmed that employer coverage would be better than that offered by McCain. “Now this is the point I’ve been making since Senator McCain unveiled his plan”, Obama said.

Holtz-Eakin said the quote was taken out of context and that he was arguing that the tax credit would not undermine employer sponsored care, which provides coverage for more than 60% of Americans under 65 years. Erosion of employer coverage under McCain’s plan is a major concern of some economists and health policy experts. The proposal “has the potential to reduce the incentive for many employers, particularly small employers, to continue providing health coverage to their employees”, argues the Commonwealth Fund, a Washington, DC, based think tank.

McCain is proposing elimination of the current tax exemptions offered to employers who provide coverage, replacing them with a refundable credit of $2500 for individuals and $5000 for families to purchase coverage in a proposed deregulated insurance market.

But Obama’s plan, which requires large employers to provide coverage or pay into a national coverage pool, is also found lacking by tax experts. It would offer tax incentives to small businesses to provide coverage, and claims it will reduce health payments by $2500 per person a year by improving technology and emphasising preventive care. “The numbers aren’t supported by anything”, commented Robertson Williams principal research associate at the Tax Policy Center, who finds the lack of specifics in Obama’s plan concerning.

Obama’s plan is expected to cost $50 billion to $65 billion when fully phased in, paid for by increased taxes on those making more than $250 000 a year. McCain says his plan would be budget neutral over 10 years.

Trying to lay some groundwork with Congress in case he does take the White House, Obama called fiscally conservative House Democrats known as the Blue Dogs.  The group, now counting 49 and expected to grow, could be significant voting block as the next President works to move health care changes through the legislative process. Wholesale reforms of the US health system have a dismal record in Congress and the new White House will need all the help it can get. Congress is expected to have a large influence on how health care reforms will look. Bills likely to influence the process already have been drafted, including several that make providing employee coverage more affordable for small businesses.

Long time health legislator Senator Ted Kennedy, Democrat of Massachusetts, is also said to be working on plan he hopes to introduce early next year. Kennedy provided a key endorsement for Obama when he was neck-in-neck with Senator Hillary Clinton for the Democratic nomination.

Nellie Bristol

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This entry was posted on Friday, October 31st, 2008 at 7:31 am and is filed under US Election, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can trackback from your own site.