McCain and Obama Health Plan Proposals, a Family Doctors View

How likely is it that the presidential election of 2008 will help provide clarity about our US national health policy? American health care continues to careen along like an ongoing train wreck, with very high prices, access problems, and inconsistent quality of service. In spite of this fact, however, there has been very little media attention to proposed plans for its reform by the two leading presidential candidates. At present, American health care costs amount to 15 percent of our national GDP, and we yet we have one sixth of our population that is left uncovered at any given time. Most of the developed countries that we like to compare ourselves to have an organized approach to delivering care, spend less than half of the GDP percentage we do, and they still manage to cover all of their populations and show far better national health outcomes than we have in the United States.

It may surprise some to know that payment in American health care is not driven not by health issues but rather by lobbyists. Physician incomes derive from how much they use procedures and high technology which benefit large firms that effectively lobby Washington. This distorts the supply of physician types, and means that primary care physicians, the bedrock of care everywhere else in the world, are paid the least. Consequently, their numbers are plummeting. Preventive care to keep people well and screen for disease is not a priority for most insurance companies, because they often see their paying clients shift between companies year by year, and most costs of chronic disease are born by the federal Medicare program, and not the private companies. Thirty percent of our American costs go to administer thousands of separate insurance schemes whose rules seem to change by the day, while most developed countries spend only 5 to 8 percent on administration. We are getting a raw deal, even if we have insurance coverage.

Much like the high price of oil, the extreme costs of American health care act as a general tax on the economy. We can’t afford the wasteful health care we have now, and with an aging population, we won’t be able to in the future. Where’s the money going to come from? I believe that as we try to answer that question, we need to also ask ourselves what we believe health care is really for? Should we continue to provide the vast majority of big pharmaceutical company profits, and pay 30 percent of our budget to insurance companies to administratively deny health care, or should we be focused on expanding coverage, providing access and improving quality?

The issue can seem completed. Understanding the difference between employer- mandated private and public plans versus tax exclusion of employer health insurance by refundable tax credits do not seem inspire the citizenry. In the media, sound bites all to often replace informed debate, when health care is mentioned at all.

In spite of all this, the upcoming election offers those of us in the US electorate us a chance to weigh in on the direction of our national health care policy, since there are major differences between the McCain and Obama plans that have implications for almost every American. Yet the political will for change, in the teeth of opposition from a gigantic medical industrial complex, is simply not yet there. A nation, which spends twice as much money per person as anywhere else in the world, but can only produce health statistics equal to Cuba and Lithuania, requires reform. But sadly, the plans of each presidential candidate are unlikely to survive lobbyist opposition, if the population remains uninformed and uninvolved. Let’s look at the plans!

John McCain's Vision for Health Care Reform

The McCain plan addresses a current major inequality in present day health insurance, which is that we have tax deductions only for employer paid insurance. If you are a business, you can create health care insurance to cover all your health care costs, which the government will then take off your income in order to reduce your taxes. McCain’s plan would replace employer insurance with a tax credit of $2,500 for individuals, $5,000 for families. The uninsured would get tax credits to buy health insurance, and market competition would lead to better, more substantial coverage. In addition, McCain proposes that Medicare shift from fee for service to “bundled” services paid at a fixed fee. The candidate and his advisors tout this plan as one that will let market forces fix health care, as plan compete. Unfortunately, market solutions have not recently worked very well in other arenas! Consider the current meltdown of our unregulated mortgage market, with the failure of Fannie Mae, Freddy Mac, Bear Stearns, Lehman Brothers and Indy Mac Bank, which has resulted in the drying up of needed credit for worthy businesses.

Under the McCain plan, what can you expect your $2,500 tax deduction to buy? If you are a young and healthy person, you will likely be able to get coverage with a large deductible. If you have a chronic condition, however, you will not be an attractive person for a company to take on. The medical insurance companies will still be unregulated, and we can expect that they will try to cherry pick their customers in order to “insure” only those without existing medical problems. Unlike real insurance, where you insure everybody so that the healthy help cover the unlucky and unhealthy; the McCain plan would create coverage for the uninsured only in theory. If you become injured or chronically ill, you’ll likely be stuck.

Obama Plan for a Healthy America

Senator Obama’s health care plan builds on the existing employer paid, private system that is now in existence. Employers will be required to offer private insurance or pay a federal tax that will be used to fund care for those who do not have access to insurance through their employer. Obama also envisions a new government health plan, “similar to what members of Congress give themselves”, and a new “insurance exchange” where those who can’t buy group health insurance will have access to affordable plans. The “cherry picking” to avoid sick patients with preexisting conditions would be outlawed. There is no “mandate” in the Obama plan that forces everyone to get insurance, except that children must have coverage. The Obama campaign believes that so many people are uninsured mainly due to the fact that insurance is unaffordable, and that people will buy reasonably priced plans if they are offered them. He and his advisors advocate that we focus intently on improving the quality of our care, and not just on reducing the cost.

Let’s hope that these issues get discussed honestly in the upcoming debates.