As part of their campaigns for the presidency, both Senator McCain and Senator Obama have outlined health care reform proposals that aim to provide access to affordable health care. The candidates' plans differ on how they would achieve their stated objectives.

The following is a summary of the candidates' health reform plans. The level of detail provided by the candidates differs on several points, which is why some of the aspects of these proposals are described in greater detail than others.

Senator Obama has outlined a three-part plan to: "1) provide every American with affordable, comprehensive health coverage; 2) rein in costs and improve the quality of care by modernizing the health care system; and 3) invest in clinical and community efforts that promote prevention and public health."1 Obama's plan would involve public insurance, including a new public insurance plan and expansions of Medicaid and the State Children's Health Insurance Program (SCHIP), as well as private insurance to provide universal coverage to all Americans. Obama's plan also would create a health insurance exchange to facilitate the enrollment of the uninsured into the new public plan or approved private plans.2 Individuals, small businesses and certain businesses with catastrophic expenses would be provided subsidies under the Obama plan.3

Senator McCain cites escalating costs as the largest barrier to access to affordable health care and health insurance. His proposal seeks to "restor[e] control" to individuals and families and would not use "state power to mandate care, coverage or costs" to provide access to care for all.4 Unlike Obama's plan, McCain's proposal would amend the tax code to provide the current favorable tax treatment of employer-sponsored coverage directly to individuals and families to help them purchase insurance coverage.5 McCain notes that such tax credits would help make health insurance portable and not linked to a specific employer, giving individuals and families more control over their care. In addition, McCain's plan would expand and encourage the use of Health Savings Accounts (HSAs). He cites as his highest priority slowing "the rapid growth in the cost of care" and transforming "the practice of medicine to help produce better health across the population."6

Access to Insurance Coverage

National Health Plan

Senator Obama would create a new national health plan (NHP) that is similar to the coverage available to federal employees and members of Congress. This plan would be available to all Americans, including those unable to obtain coverage through their workplace or through public programs such as Medicare, Medicaid or SCHIP. The NHP also would be available to small employers that do not offer insurance. Individuals ineligible for Medicaid or SCHIP but needing financial assistance would receive an income-based subsidy to purchase coverage through the NHP. Specifics on income levels and the type of subsidy are not currently known.7 Senator McCain's proposal does not include the creation of a new national health plan.

Senator Obama's plan would create a national Health Insurance Exchange, which would offer individuals a choice of health plans. Plans offered through the Exchange would be required to meet federal regulations, offer benefits at least to the level of the NHP and meet quality and efficiency standards. In addition, the plans would be required to enroll every applicant and charge the same premium regardless of health status. The Exchange would review and approve any above-average increases in premiums.8 To address the costs associated with catastrophically ill people enrolled in an employer-sponsored health plan, the Obama plan includes reinsurance payments. These payments would go to employers who agree to use the funds to reduce employees' premiums.9

Senator McCain's plan does not include an entity similar to Obama's proposed Heath Insurance Exchange. Instead, McCain's plan would create a Guaranteed Access Plan, which would be available to those who are denied coverage for pre-existing conditions. McCain would work with states to develop a model for the GAP, which would feature limits on premiums. In addition, financial assistance would be provided to individuals with incomes below a certain level.10 McCain also has called for greater access to care through the use of walk-in clinics in retail outlets.11

Private Insurance Reforms and Coverage Mandates

Under Senator Obama's plan, employers would be required to contribute to the cost of their workers' health care and children would be mandated to have coverage. The Obama proposal utilizes a "pay-or-play" technique that requires employers to offer "meaningful" coverage or make significant contributions to their employees' coverage. Employers that do not meet this requirement would be required to pay a percentage of their payroll to the NHP. Small businesses would be exempt from this requirement; however, they would qualify for a refundable tax credit of up to 50 percent of premiums paid on behalf of their workers if they pay a "meaningful share" of the cost of a health plan. In addition to the coverage mandate, the Obama plan would allow people up to age 25 to receive coverage through their parents' plan.12

Senator Obama's plan also would increase the federal regulation of private insurance.13 For example, the Obama plan would prohibit insurers from denying coverage based on pre-existing conditions, prohibit "unjustified price increases" and require insurers to pay a "reasonable share" of premiums on patient care benefits in areas without sufficient market competition. In addition, Obama's plan would require health plans to disclose the percentage of premiums that are used for patient care and administrative costs.14

Senator McCain's plan does not include coverage mandates.15 McCain's insurance reform plan is aimed at putting families in control of their health care dollars and has three components: amending the tax code to provide all individuals with the same favorable tax treatment afforded to those who receive employer-provided coverage; the provision of refundable individual health insurance tax credits of up to $2,500 for individuals and $5,000 for families; and the deregulation of non-group insurance by allowing the purchase of policies across state lines.16 Under McCain's plan, families would select the health plan that best suits their needs and pay the insurer directly. McCain's plan would permit those with "innovative multi-year policies" that cost less than the tax credit to deposit the surplus into HSAs. McCain's plan would permit veterans to use the funds that would otherwise support their care in the Veterans Affairs' (VA) health system to pay for care from providers in the private health market.17

Quality Improvement and Other Reforms

Both candidates have indicated controlling costs and improving quality are key aspects of their health care reform plans.

While not providing details, Senator McCain's plan would promote health information technology and telemedicine. In addition, the McCain plan would support the development of national standards for measuring and recording treatments and outcomes. His plan also would make public health care providers' data regarding medical outcomes, quality of care, costs and prices.18

Senator Obama also has called for increased comparative effectiveness research and improving care coordination and quality by supporting medical homes. Like McCain, Senator Obama's proposal would promote transparency in health care pricing and quality. Under Obama's proposal, hospitals and providers would be required to collect and publicly report quality and cost data, including rates of hospital-acquired infections and preventable medical error rates.19 Senator Obama has also cited the importance of health information technology, proposing to invest $50 billion in electronic medical records and other health information technology.20

Both candidates support the re-importation of drugs and encourage the use of generic drugs and biologics. Senator McCain also has proposed to require drug companies to disclose the price of their drugs.21 McCain proposes to work with insurance companies and businesses to promote the availability of smoking cessation programs.

Regarding medical malpractice, Senator McCain has proposed to enact reforms to limit frivolous lawsuits and excessive damages. McCain's plan would protect patient access to legal remedies for patients exposed to "bad medical practice," while providing safe harbors for care that is within clinical guidelines and safety protocols.22 Senator Obama, however, would reform medical malpractice by strengthening antitrust laws and promoting alternatives to address physician errors, while maintaining patient rights.23

Medicare Reforms

Senator Obama has indicated he would repeal the ban that prohibits Medicare from negotiating drug prices with manufacturers. Obama also has indicated that Medicare Advantage plans would not receive higher payments than provided under the fee-for-service Medicare program.24 Senator McCain has proposed to provide Medicare payments for diagnosis, prevention and care coordination. McCain's plan also would eliminate Medicare payments for preventable medical errors.25

Footnotes

1 Obama, Barack, Promising All American Good Value and Good Health, CONTINGENCIES, Sept/Oct 2008, at 33.

2 Kaiser Family Foundation, 2008 Presidential Candidate Health Care Proposals: Side-by-Side Summary, available at http://www.health08.org/sidebyside_results.cfm?c=5&c=16 (last modified July 21, 2008).

3 Id.

4 McCain, John. Better Care at Lower Cost for Every American, CONTINGENCIES, Sept./Oct 2008, at 29.

5 Id.

6 Id.

7 Antos, Joseph, Wilensky, Gail, and Kuttner, Hanns, The Obama Plan: More Regulation, Unsustainable Spending, HEALTH AFFAIRS, September 16, 2008, at w462.

8 Id.

9 Id.

10 Kaiser Family Foundation, 2008 Presidential Candidate Health Care Proposals: Side-by-Side Summary, available at http://www.health08.org/sidebyside_results.cfm?c=5&c=16 (last modified July 21, 2008).

11 "Straight Talk on Health System Reform," JohnMcCain.Com, available at http://www.johnmccain.com/Informing/Issues/19ba2f1c-c03f-4ac2-8cd5-5cf2edb527cf.htm

12 Obama, Barack, Promising All American Good Value and Good Health, CONTINGENCIES, Sept/Oct 2008, at 33.

13 Antos, Joseph, Wilensky, Gail, and Kuttner, Hanns, The Obama Plan: More Regulation, Unsustainable Spending, HEALTH AFFAIRS, September 16, 2008, at w462.

14 Kaiser Family Foundation, 2008 Presidential Candidate Health Care Proposals: Side-by-Side Summary, available at http://www.health08.org/sidebyside_results.cfm?c=5&c=16 (last modified July 21, 2008).

15 McCain, John. Better Care at Lower Cost for Every American, CONTINGENCIES, Sept./Oct 2008, at 29.

16 Buchmueller, Thomas, Glied, Sherry, Royalty, Anne, and Swartz, Katherine, Cost and Coverage Implications of the McCain Plan to Restructure Health Insurance, HEALTH AFFAIRS, September 16, 2008, at w472.

17 Kaiser Family Foundation, 2008 Presidential Candidate Health Care Proposals: Side-by-Side Summary, available at http://www.health08.org/sidebyside_results.cfm?c=5&c=16 (last modified July 21, 2008).

18 Id.

19 Obama, Barack, Promising All American Good Value and Good Health, CONTINGENCIES, Sept/Oct 2008, at 33.

20 Kaiser Family Foundation, 2008 Presidential Candidate Health Care Proposals: Side-by-Side Summary, available at http://www.health08.org/sidebyside_results.cfm?c=5&c=16 (last modified July 21, 2008).

21 Kaiser Family Foundation, 2008 Presidential Candidate Health Care Proposals: Side-by-Side Summary, available at http://www.health08.org/sidebyside_results.cfm?c=5&c=16 (last modified July 21, 2008).

22 "Straight Talk on Health System Reform," JohnMcCain.Com, available at http://www.johnmccain.com/Informing/Issues/19ba2f1c-c03f-4ac2-8cd5-5cf2edb527cf.htm

23 Kaiser Family Foundation, 2008 Presidential Candidate Health Care Proposals: Side-by- Side Summary, available at http://www.health08.org/sidebyside_results.cfm?c=5&c=16 (last modified July 21, 2008).

24 Id.

25 Id.

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