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Senators John McCain (R-AZ) and Barack Obama (D-IL) offer competing visions of healthcare in America.

Do Not Forget About Healthcare
The McCain Plan vs. The Obama Plan.

-- Maya Jones M.D., MPH
-- Amanda Muir, M.D.

Underneath all of their political jargon, at the bottom of their list of campaign platforms lie Senators John McCain and Barrack Obama’s health care proposals. As election day nears, these proposals are becoming increasingly obscured by the current Wall Street woes. Unfortunately, these financial concerns place even more pressure on our next president to correct the health care system. With less disposable income, families will be forced to allocate fewer resources toward their healthcare, foregoing doctor appointments and necessary medications. Most importantly, as unemployment rises, and fewer people have access to employee-based insurance, more Americans will be without health insurance. While all eyes look to McCain and Obama to see how they will help us weather the current financial crisis, we cannot forget to examine their health care plans.

The McCain Plan

Senator John McCain’s healthcare plan is a direct extension of his small government, free market economy ideals. He wants the power of choice in the hands of the people and not the hands of the government. An important part of his plan is to use competition to improve quality and lower cost. While continuing the option of employee based health insurance, McCain proposes a $2,500 tax credit for individuals and a $5,000 tax credit for families, thereby providing Americans with subsidies to purchase their own health insurance. With a greater number of individual buyers of insurance, the theory is that insurance companies will compete for business by lowering the premiums they charge. Those obtaining innovative cost effective insurance at rates less that the tax credit can deposit the remainder in a Health Expanded Savings Account to be utilized when needed. To further encourage competition among insurance companies, McCain would allow individuals to purchase insurance “nationwide, across state lines.” This would allow insurance policies sold in states with fewer regulations to be sold in more highly regulated states with greater benefit requirements and therefore historically more expensive coverage.

In addition, McCain plans to do away with tax exclusions for employee-sponsored benefits. Specifically, this means that employees obtaining health insurance from their employer will begin to pay taxes on the value of the benefits. With elimination of the favorable tax treatment of employer-sponsored health insurance, employers will be less likely to offer health insurance.

The crux of the McCain plan is personalization of insurance purchasing. Each family will select a health care plan that fits its specific needs and lifestyle. A healthy individual may opt for a low premium, high deductible plan, whereas someone with a complex medical history may choose a more expensive plan and open a Health Savings Account to help cover medical costs. Because an insurance plan would not be tied to a particular employer, people could change jobs without fearing gaps in their insurance.

To lower healthcare costs, McCain proposes incentives: 1) cheaper drugs through safe implementation and faster introduction of generic drugs, 2) more innovative methods for reducing costs of chronic diseases emphasizing pretension and healthier habits, 3) greater access to simple care including walk-in clinics at retail outlets, and 4) smoking cessation programs.

The major problem with McCain’s plan is that there is no obvious solution for the elderly or people with complex medical problems. Personalized health insurance means that sicker people pay much more for coverage than healthy people. It is hard to determine if these populations would be able to afford insurance or if they would even qualify for coverage. With the lower cost premiums for the young and healthy, the costs would shift to the elderly and sick. McCain notes on his website that he intends to circumvent this problem by creating a non-profit corporation to help insure these populations but details for this are not available.

Another, more obvious problem with this plan is how it will affect low-income households. Even with an extra $2,500, there are still many people who would not be able to afford health insurance. Last year the average health insurance policy cost employers $12,000. Furthermore, this $2,500 tax credit is not indexed to health care inflation so it will eventually lose value over time.

In summary, in efforts to reduce the cost of insurance, the McCain plan could increase health insurance coverage for those who need minimal healthcare services and those who are currently well, but could exacerbate our current national challenges of under-insurance and lack of care or for low-income families, those with chronic medical conditions, and the elderly. Due to high costs of healthcare without insurance, these populations would likely forego preventive and maintenance care and would continue to use high cost emergency and hospital services, further exacerbating our nation’s healthcare costs.

The Obama Plan

Barack Obama plans to sign a universal health care plan into law by the end of his first term in office. Obama’s plan will make available a new national health plan so all Americans, including those employed by small businesses and the self-employed, can buy affordable coverage that is similar to the plan available to members of Congress. The main features of this plan are that (1) no American will be turned away from any insurance plan due to pre-existing conditions or illnesses; (2) the plan will be simple to enroll in and provide ready access to coverage; (3) participants will be able to move from job to job without changing plans or jeopardizing their coverage; (4) individuals who do not qualify for Medicaid or SCHIP but still need financial assistance will receive a federal subsidy to buy into the public plan or to purchase private insurance; and (5) participating insurance companies will be required to report data to ensure a universal standard for quality and efficiency.

In addition to the public health insurance plan to cover all Americans, Obama also plans to create a national health insurance exchange. The idea behind the exchange is to help those individuals who want to purchase a private insurance plan. Similar to those insurers that are a part of the new public plan, private insurers will also have rules and standards to abide by to ensure fairness and quality. The private insurers will be required to offer plans that are at least as generous as the public plan and will not be able to base premiums on the health status of individuals. The exchange will evaluate these plans and make the similarities and differences amongst the plans, including costs of services, publicly available information.

By providing affordable and efficient health care and reducing unnecessary spending in the healthcare system, as well as promoting prevention and public health, the Obama campaign claims their plan would save the typical American family up to $2,500 every year. Also, the eligibility for the Medicaid and SCHIP programs will be expanded.

Employers will still have the choice of whether or not they want to provide employees with health care coverage; however, those employers that do not offer quality health insurance will be required to contribute a percentage of their payroll toward the costs of the national plan. Small businesses will be exempt from this requirement and will instead receive a new Small Business Health Tax Credit that will help reduce health care costs for small businesses by providing a tax credit up to 50% on premiums paid by these businesses on behalf of their employees. This new credit will provide a strong incentive to small businesses to offer high quality health care to their workers and help improve the competitiveness of America’s small businesses.

Healthcare providers will be required to report preventable medical errors, hospital acquired infections, healthcare disparities, and nurse staffing ratios. Also, providers who see patients enrolled in the new public plan, the National Health Insurance Exchange, Medicare, and FEHBP will be rewarded for achieving performance thresholds on outcome measures rather than the volume of patients seen or services provided. Obama also plans to invest $10 billion a year over the next five years to provide standards-based electronic health information systems including electronic health records.

There are three main concerns with Obama’s plan; first is that when compared to McCain’s plan the consumer has less ability to create a personalized insurance plan. For example, a healthy 25-year-old would have a more difficult time finding a low deductible, high premium plan. Another problem with Obama’s plan is while boasting that no one with pre-existing medical conditions will be turned away, insurance companies will have to drive up their premiums to offset the new costs incurred by providing benefits to these more expensive customers. These higher premiums then may deter healthier customers from purchasing health insurance that they deem not worth the additional cost. Finally, the term universal health coverage may be a misnomer in regards to Obama’s health care plan. While he intends to require health insurance for all children, he is not making health insurance for adults mandatory. Under this policy it is possible that some adults could be left without any insurance.

Both candidates agree that we are in a health care crisis: there are currently 46 million people without insurance – eight million of whom are children. In addition, the cost of health care has risen four times faster than wages over the past six years, and there is not enough emphasis on health care prevention and public health. Each candidate attacks these problems from a different angle. Obama’s plan emphasizes decreasing gaps in health care coverage and lower health care costs by claiming to increase efficiency, while McCain’s plan places insurance choices in the hands of the people and claims to decrease rising insurance costs. In sifting through the policies and platforms of the candidates, it becomes apparent that the implications these policies would bring stand to drastically change how the average American receives the health care.

Let’s not forget about health care.

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