Universal Healthcare Coverage: It’s Debatable

As the unemployment rate continues to climb in the wake of the U.S. economic crisis, health coverage is becoming an even bigger issue for voters. But neither John McCain or Barack Obama has really staked out a health-care position that is resonating well with Americans.

 

Beyond a few overlapping ideas on preventive care and health-information technology, Sens. Barack Obama and John McCain have dramatically different views on how to fix the nation’s health-care system.

Yet when it comes to how Americans think the candidates’ plans would affect them personally, four in 10 registered voters said they don’t believe one would be better than the other, according to a recent poll of 935 voters from Harris Interactive and researchers at the Harvard School of Public Health. Within that group, 13% said they didn’t know if there would be a difference. A third of voters say Obama’s plan would work better for them, while 27% favor McCain’s plan.

 

The health-care blueprints laid out by both candidates would maintain a significant role for private health insurers. Obama’s reform plan would build on the existing employer-based health insurance system, expand access to Medicaid and the state children’s health insurance program and require all employers except small businesses either to offer coverage or contribute to its cost. Obama’s goal of universal coverage starts by mandating that all children have insurance and that insurers take all applicants regardless of their health status. He also wants to introduce a government-administered plan similar to the one available to federal employees that would compete with private plans in a new market he calls the National Health Insurance Exchange.

 

McCain’s proposal doesn’t aim for universal coverage but would radically change the way health insurance is financed and distributed, experts say. His plan revolves around two major themes: Changing the tax code and loosening state regulations that govern health insurance. He would replace the tax exclusion workers currently get for their job-based health plans with a refundable tax credit of $2,500 for individuals or $5,000 for families, effectively making the value of insurance taxable income for the first time and encouraging people to buy coverage in the individual market.

 

In the voter poll, the biggest gap appeared to be on the issue of securing health insurance, where Obama carved out a lead: 45% of uninsured people said Obama’s proposal would be more likely to provide them with coverage, compared with just 14% for McCain, according to the survey. In addition, 31% of currently insured people said they would more likely be protected from losing their insurance under Obama’s plan versus 19% who said the same about McCain’s proposal.

 

McCain’s plan would have little effect on the number of uninsured in the beginning, but over time, the number of uninsured people is likely to grow as the value of his proposed tax credit erodes relative to rising health-care costs. His plan likely would result in less-generous policies than the ones people have now.

 

Despite fears that all employers would drop their coverage as a result of the tax changes, it doesn’t appear that would be the case, though many small employers may cease offering insurance, observers have noted.

 

The tax changes would lead to about 20 million people initially losing employer coverage and 21 million people enrolling in individual coverage, including some who are currently uninsured and others who would lose job-based group coverage, the study found.

 

McCain’s plan relies heavily on the individual market, where administrative costs are far higher than in the group insurance market. Much more of the spending would be going toward administrative overhead in McCain’s proposal than Obama’s.

 

McCain’s proposal tries to account for the people with pre-existing conditions who would be left out of the individual market due to prohibitively high costs or denials of coverage by creating what he calls Guaranteed Access Plans, or high-risk pools for the sick. Thirty-four states now sponsor such pools, but they cover fewer than 200,000 consumers, and it would take far more than the $7 billion to $10 billion that McCain has proposed to subsidize affordable coverage for the people who would need it, the Health Affairs report found.

 

Another of his ideas, deregulating state insurance rules so people could buy coverage across state lines, may result in loss of protections such as minimum benefits standards, limits on who can be excluded from health plans and access to appeals processes for denied claims.

 

“The worry you have is there would kind of be a race to the bottom to see which states can have the least consumer protection, and that’s where the healthiest would go. The sick people would be left in a pool without any healthy people to bolster them.

 

Some health care experts have noted that, when you’re a young and healthy person now, there are no pressing concerns, but what do these proposals accomplish to protect you now against the day when you do get older and sicker?