Comparison of Obama and McCain’s Health Care Plans

The Commmonwealth Fund has compared the health care plans of Barack Obama and John McCain and found that Obama’s plan would do far more to provide health care coverage to the uninsured. They made comparisons of the costs of the two plans. I find it interesting that, although it accomplishes far less, the cost of McCain’s proposals are far closer to the cost of Obama’s than I would have guessed. Surprisingly, McCain’s plan would initially cost far more than Obama’s plan while covering 17 million fewer people as most of the tax credits in McCain’s plan would be used by people who currently have private health insurance:

  • If implemented in 2009, McCain’s proposal is estimated to reduce the number of people who are uninsured by 1.3 million at a cost of $185 billion, though this does not include the effects of high-risk pools. About 20 million people would lose employer coverage under the McCain proposal, and 21 million would gain coverage in the individual market. Obama’s plan is estimated to reduce the number of uninsured people by 18.4 million in 2009 at a cost of $86 billion.
  • In the first year, McCain’s plan is estimated to cost more than twice as much as Obama’s while covering 17 million fewer people because most of McCain’s tax credits would likely be used by people who already have private health insurance.
  • By 2018, McCain’s plan is estimated to reduce the number of uninsured by just 2 million out of projected 66.8 million uninsured at a cost of $64 billion. Obama’s plan is estimated to reduce the number of uninsured by 33.9 million in that year at a cost of $237 billion.
  • Over the 10-year period, the Center estimates that the total federal cost of McCain’s plan could reach $1.3 trillion and the cost of Obama’s plan could reach $1.6 trillion.
  • McCain’s proposal is estimated to cover fewer people in future years and cost less over time because the tax credits would grow at the rate of consumer prices, which have historically grown more slowly than medical expenditures. This means that, over time, the value of the tax credits is expected to decline relative to premium costs. This has two implications: 1) fewer people would be able to afford to buy health insurance with their tax credits and 2) people with employer coverage will pay more taxes on employer-provided premium contributions, thus offsetting the federal government’s cost of the tax credits over time.
  • The Center estimates that McCain’s high-risk pool proposal, if adequately financed, could add another $1 trillion to the cost of his plan over 10 years. This feature is likely to be expensive for two reasons: 1) allowing people to buy coverage across state lines would remove existing consumer protections in some states, leading many people who currently have coverage through those markets to the high-risk pools and 2) many people with health problems who lose employer-based coverage under McCain’s proposal would seek coverage in high-risk pools.

After considering these measures of cost and number insured they look at additional features and expressed a view of the plans with regards to which proposal holds the greatest promise:

Measured against these broad principles, Obama’s proposal for mixed private–public group insurance with a shared responsibility for financing has greater potential to move the health care system toward high performance than does McCain’s proposal to encourage individual market coverage through the use of tax incentives and deregulation (Figure ES-4). Compared with McCain’s approach, Obama’s approach could provide more people with affordable health insurance that covers essential services, achieve greater equity in access to care, realize efficiencies and cost savings in the provision of coverage and delivery of care, and redirect incentives to improve quality. In the absence of a requirement that everyone has affordable coverage, however, the proposal is likely to fall short of achieving universal coverage.

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