Health Care

John McCain

Barack Obama

*Translation

Under John McCain's plan, individuals would receive $2,500 and families $5,000 in refundable tax credits to offset the cost of private or employer-provided coverage. He would also reform the tax code to allow people to pursue health care options across state lines. "Families should be able to purchase health insurance nationwide, across state lines, and their policy should follow them from job to job," McCain has said. The Republican would replace the Employer Health Benefits Tax Exclusion, which exempts employers from paying federal income and payroll taxes on premium payments, with the tax credit. Those denied coverage could buy into a federally subsidized high-risk pool called the Guaranteed Access Plan. He would also promote greater competition among drug companies, including importation of drugs and push for generic drugs to be produced more quickly. McCain has not offered a cost estimate on his plan, but his campaign stated earlier this month that he will keep the policy “budget-neutral” by cutting Medicaid and Medicare spending.

The Democrat would create a federal health insurance program to cover those who don't qualify for existing medical programs, such as Medicaid, or who aren't covered by their employer. Benefits would be similar to those provided under the Federal Employees Benefits Program, according to Obama's campaign Web site. He also would require health coverage for all children, and adults younger than 26 could still be covered by their parents' plans. Insurers would be prohibited from denying coverage or basing the premium on risk assessment. Employers that do not provide a group plan would be required to contribute to the national program. Obama also says he would repeal the ban on negotiating with drug companies and would allow citizens to buy medicine from other "developed countries" if they are safe and available at a lower cost. In May, the Obama campaign estimated the plan would cost between $50 billion and $60 billion a year. He would pay for the program by eliminating President Bush's tax cuts for those who earn more than $250,000.

In 2005, 47 million Americans were without health care coverage, including 8.7 million children, and the number had increased by 9 million since 2000, according to the U.S. Census Bureau. According to the Tax Policy Center, a nonpartisan collaboration of the Urban Institute and Brookings Institution, McCain's plan would increase the national deficit by $1.3 trillion over 10 years and trim the number of uninsured Americans by 1 million in 2009 and 3 million by 2013. But after that, the number of uninsured would rise because the tax cuts would not keep pace with the rising cost of premiums. Obama's plan would cost $1.6 trillion but reduce the number of uninsured people by 18 million in 2009 and 34 million by 2018. But, far from covering everyone, the center projects that 34 million would remain uninsured in 2018. The Lewin Group, a nonpartisan health care policy research group, concluded that full implementation of the plans would reduce the uninsured by 21.1 million in 2010 under McCain’s plan and 26.6 million under Obama’s plan. The group estimated the 10-year federal cost of McCain’s proposal at $2.05 trillion, or $205 billion a year, and Obama’s at $1.17 trillion, or $117 billion a year. Under Obama’s plan, premiums would increase for younger, healthier people and decrease for older and sicker Americans because the premium could not be based on health risk. Under McCain’s plan, it would be the opposite because of the cross-state sale of insurance, the group says. But, the group finds that both plans would reduce premiums; Obama’s by providing a tax credit to small businesses and establishing a federal reinsurance program, and McCain’s by getting around state minimum coverage laws and reducing premiums in the individual insurance market by creating federally-subsidized high-risk pools. “Both proposals show dramatic reductions in health spending across most demographic and economic groups,” the Lewin Group writes. “However, this is overwhelmingly explained by the fact that neither candidate has specified how they would pay for these health plans.” Source: U.S. Census Bureau, Tax Policy Center, The Lewin Group