The basic difference in the major candidates’ proposals for “health care reform,” according to Mark Pauley, writing in Health Affairs, is that McCain recognizes that workers earn their health benefits, while Obama apparently views benefits as the employer’s money (Greg Scandlen, Consumer Power Report 10/16/08).
Obama and supporters claim that the McCain plan will cause workers to lose employer-sponsored insurance, while Obama’s will permit those who like their employer-sponsored plan to keep it.
Summarizing the only two academic studies of the McCain and Obama plans,
John Goodman writes that, according to the Lewin study, 9.4 million would lose employer coverage under McCain, and 13.9 million under Obama. That means for every three people who lose coverage under McCain, four would lose it under Obama. The loss under Obama could be much higher. Employer-based coverage could actually increase with the McCain plan, while dropping by 60 million under Obama, according to the analysis by Roger Feldman of the University of Minnesota.
Obama promised that people buying insurance on their own would have access to the same coverage as members of Congress. The Lewin study assumes that the government-sponsored “national plan,” with the same on-paper benefits, would pay providers 25%, or even 40% less than private plans do.
Medicaid rolls would swell by 16.6 million under Obama, and shrink by 12 million under McCain, as Medicaid enrollees shifted to private plans.
Neither candidate has proposed a realistic way to pay for his proposal. The estimated 10-year cost is $2.1 trillion for McCain and $1.1 trillion for Obama (according to Lewin), and $2 trillion for McCain and $6 trillion for Obama (according to Feldman).
According to an analysis by the Pacific Research Institute (PRI), the McCain plan would help to end job lock, and result in a wage increase averaging $9,000 per year. PRI states that the Obama “job-killing” taxes would be especially harmful to low-income workers, and his reforms would lead to a “death spiral” for privately chosen health insurance (John R. Graham, “Presidential Prescriptions: Diagnosing the Candidates’ Health Reforms, PRI 10/14/08).
The McCain tax credit would correct the “arbitrary, unfair, and wasteful” distribution of tax benefits for health insurance, writes John Goodman. The Obama proposal would “build on today’s regressive, discriminatory subsidies for employment-based insurance,” while new rules would make insurers “little more than functionaries in a new federal government regulatory regime,” states Grace-Marie Turner (Health Care News, September 2008).
Senator Obama seems to be confusing a tax credit with a tax deduction, suggests Ralph Weber, who spoke at the 2008 AAPS annual meeting. A $5,000 tax credit is the equivalent of a $20,000 deduction for most families. It actually is enough to pay the average family health insurance premium in New Mexico, leaving $2,000 to start building up health savings. McCain has also proposed allowing the purchase of health insurance across state lines (FlashReport 10/16/08).
The New England Journal of Medicine shows its political colors in its Oct 16 article, “Primum Non Nocere—the McCain Plan for Health Insecurity.” It concludes that “Senator McCain’s plan does not demonstrate the kind of judgment needed in a potential commander in chief of our health care system”—assuming a “system” that has a commander in chief (David Blumenthal, N Engl J Med 2008;359:1645-1647). For balance, however, Joseph Antos of the American Enterprise Institute writes in an accompanying article that Obama’s “hopes are too audacious to be believed.” A pay-or-play mandate amounts to a tax on labor (N Engl J Med 2008;359:1648-1650).
The “usual suspects show up as savers: health information technology, prevention, and comparative-effectiveness research”—but none is “likely to produce savings any time soon,” Antos writes.