The Partisan Divide — The McCain and Obama Plans for U.S. Health Care Reform
Jonathan Oberlander, Ph.D. New England Journal of Medicine August 21, 2008 In the face of escalating costs, uneven quality of care, and the growth of the uninsured population, there is broad agreement that the U.S. health care system requires reform. However, Democrats and Republicans remain sharply divided over how to reform it, as evidenced by the health care plans offered by the parties' presidential candidates. The ambitious reform agendas of Senators John McCain (R-AZ) and Barack Obama (D-IL) would take the U.S. health care system in very different directions.
McCain's plan would make things worse than they already are:...most uninsured Americans would probably remain uninsured under the McCain plan. Given the high price of health insurance, even with the new tax credits, many lower-income people would still not be able to afford coverage. And if the credits are not indexed to the rate of growth in health care spending, that affordability gap would grow over time (as would the number of Americans who would pay higher taxes for employer-sponsored health insurance). Indeed, with the proposed credits, many Americans could afford only high-deductible insurance policies. The McCain plan could consequently trigger a move from comprehensive insurance toward thinner coverage policies that shift costs onto sicker patients. Moreover, some employers, particularly smaller businesses, might stop offering insurance if the tax benefits of employer-sponsored insurance were eliminated. As a result, some currently insured workers could lose coverage.
Obama's plan is better all the way around with a choice between public or private insurance:The Obama campaign emphasizes that its plan offers a choice of insurance options. Rather than deciding whether public or private insurance is a better model, the plan would allow people to choose between them. In addition, the new national health plan and insurance exchange would provide insurance pooling and purchasing power that, along with insurance-market regulation, would effectively address the problems that Americans without group coverage encounter when trying to purchase affordable insurance on the individual market.
The Obama campaign says that the insurance exchange, by providing broader pooling and cutting marketing expenses, can reduce administrative expenses in private insurance and promote competition. The plan also calls for a new system of reinsurance, whereby the federal government would reimburse employers for a portion of the costs they incur for employees with high-cost, catastrophic medical cases — theoretically enabling businesses to reduce insurance premiums and particularly benefiting smaller businesses whose risk pools are too small to spread the costs of expensive cases.
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