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Candidates' Health Plans: Healthy Impact?
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Commonwealth Fund Says Obama's Plan Insures More People Than McCain's; Critic Challenges Group's Projections
By Salynn Boyles
Reviewed By Louise Chang, MD
Oct. 2, 2008 -- Twice as many uninsured people in the U.S. will have health insurance in 10 years under Sen. Barack Obama's health care plan than under Sen. John McCain's plan, according to a report by the health care research group The Commonwealth Fund.
The report released today highlights what the group considers to be key differences and areas of agreement in the health care reform packages proposed by the two presidential candidates.
Insurance coverage projections came from a report released last month by the Tax Policy Center, a nonpartisan group that is a joint project of the Brookings Institution and the Urban Institute.
Tax Policy Center analysts estimated that McCain's proposal would reduce the number of Americans who are uninsured from a projected 67 million to 65 million in a decade, while Obama's proposal would leave 33 million people uninsured.
A critic of the report, Robert Moffit, PhD, who directs the Center for Health Policy Studies for the conservative think tank Heritage Foundation, called the projections "nonsense."
He also noted that Obama's plan is very similar to one put out by the Commonwealth Fund earlier this year. Commonwealth Fund President Karen Davis acknowledged this in a news conference Wednesday.
The cost of McCain's health care plan over a decade was projected to be $1.3 trillion, compared to $1.6 trillion for Obama's plan.
"This week as we face a crisis in our financial system we must also remember that we are facing a crisis in our health care system," Davis says.
She notes that between 1999 and 2007, the number of uninsured Americans increased by 20% to 46 million people. And millions more are underinsured, with health insurance that does not cover their medical needs.
"Rising health care costs and the decreasing quality of health insurance coverage are contributing to the economic insecurity of American families by shifting more of the financial burden of health care costs to families," she says.
Comparing the Candidates' Plans
John McCain's health care plan seeks to expand coverage through the individual insurance market by allowing people to shop for health insurance nationwide and by replacing the current tax exemption for employer-provided insurance with tax credits of $2,500 for individuals and $5,000 for families.
Under McCain's proposal, employer contributions to insurance plans they provide to employees would be taxable. He also favors the creation of a federal fund to expand existing state high-risk pools to people who have health conditions that make it difficult to get private coverage.
Commonwealth Fund Assistant Vice President Sara R. Collins tells WebMD that McCain's plan would be much fairer for low- and middle-income Americans than the Bush administration's recent proposal to replace the employee benefit tax deduction with personal income tax reductions for people who purchase health insurance.
"That would have targeted higher-income households," she says. "McCain's tax credits offer much more for lower- and middle-income families. It is far more progressive in that sense."
Obama's plan seeks to expand coverage by offering a mix of private and public group health insurance options.
With the exception of small businesses, all employers would be required to offer health insurance to the people they employ or contribute to the cost.
Eligibility for Medicaid and the children's health insurance program known as SCHIP would be expanded, and small businesses, self-employed people, and those who do not have coverage through their employers, Medicaid, or SCHIP would be able to purchase a plan through a nationwide insurance market.
In a Wednesday news conference, Collins noted that both proposals fall far short of universal health care.
But she added that Obama has stated his support for universal coverage, while McCain has not.
Roughly 160 million Americans -- more than 60% of the population under the age of 65 -- currently have employer-provided health insurance.
Collins says employer-provided coverage is likely to increase under Obama's plan and decline under McCain's because of the McCain proposal to tax employer contributions to the health plans they provide.
The report concludes that "Senator Obama's plan shows the greater potential for making care more affordable, accessible, efficient, and higher quality, though it will likely fall short of covering everyone."
Critic's Perspective on the Commonwealth Fund Report
Moffit tells WebMD that he's not surprised by the report's conclusion, since the Obama plan is very similar to one proposed by The Commonwealth Fund earlier this year.
Besides criticizing the report's projections of uninsured people, Moffit faults the report for concluding that McCain's proposed tax changes will only have limited effects on boosting the number of insured Americans.
"We have never had a tax policy like this, so there is no historical experience to draw from," he says. "But it is hard to believe that giving this kind of generous tax relief, including refundable tax credits, to vast numbers of people will only result in 2 million more insured."
He adds that the assertion that Obama's plan will be more "affordable, accessible, efficient and higher quality" is not supported by facts.
"Both McCain and Obama are promoting the expanded use of health information technology and disease management care coordination," he says. "These are the kinds of things that will improve the system and there is no debate about them."
Moffit contends that McCain's plan will make health care more portable and give people more options about where they get their heath insurance.
"These days, job lock is a huge problem," he says. "Many, many people stay in jobs they don't like because they don't want to lose their health insurance. Under McCain's plan people won't be punished by the tax code for changing jobs."
SOURCES: The Commonwealth Fund: "2008 Presidential Candidates' Health Reform Proposals? Choices for America." Karen Davis, president, The Commonwealth Fund. Sara R. Collins, assistant vice president, The Commonwealth Fund. Robert E. Moffit, PhD, director, Center for Health Policy Studies, Heritage Foundation. Urban Institute-Brookings Institution Tax Policy Center: "An Updated Analysis of the 2008 Presidential Candidates Tax Plans." WebMD: "John McCain on Health Care." WebMD: "Barack Obama on Health Care."
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