McCain's main proposal focuses on tax credits. He believes the present system is unfair. That system works something like this: The worker at the large corporation gets, on average, insurance that costs about $12,000, out of which about $3,000 comes from his own paycheck. That $9,000 difference is a freebie -- it doesn't count as income for tax purposes. Meanwhile, the small-business person buying his or her own policy on the individual market has to pay $12,000 out of personal funds, with no tax advantage.
McCain's proposal would tax the $9,000 as income if a person continued to get insurance through the employer. For those who didn't, he offers a tax credit of $2,500 for individuals, $5,000 for a family, which they could use to buy insurance directly.
A study by the trade journal Health Affairs concluded that
McCain's plan would ''greatly reduce the number of people who obtain health insurance through their employers'' -- perhaps a drop of 10 million to 28 million of the more than 150 million who now have employer coverage.
Many, including some of the 45.7 million people now uninsured, would move to the individual market, resulting in a net reduction in the uninsured of about one million, according to Health Affairs.
But since the
average employer-based policy now costs $12,680 for a family, according to a Kaiser study, people in the individual market are likely to opt for less coverage with the $5,000 they have to spend -- meaning higher deductibles and co-payments.
What's more, says Health Affairs,
administrative costs on individual policies are considerably higher, meaning that purchasers of individual policies get less for their money. McCain's health advisors believe that savvy consumers should be able to force the insurers to offer better benefits.
The Brookings Institution, considered by some to be a liberal think tank, estimates that the McCain tax shifting would cost about $130 billion a year, but McCain's campaign says changes might not increase taxes because the tax credits would be offset by companies losing their health-insurance deduction. The McCain plan would also save money by major cuts in Medicare and Medicaid, an aide told The Wall Street Journal in an article published Monday.
Regina Herzlinger, a Harvard business professor, insists that reforming the tax code is ''essential for the survival of the U.S. economy,'' because each
General Motors car now includes costs of $1,500 in employee health benefits -- while foreign manufacturers may spend $100 a car on those.
Even so, the tax credits are questioned by the Business Roundtable, a group representing the largest companies in the country, including Ryder and FPL Group. Ivan G. Seidenberg, chief executive of Verizon and the Roundtable's leader for healthcare, calls
McCain's plan ''a theoretical answer -- not rooted in a practical base'' because it undermines the employer-based coverage that many Americans like.
Critics argue that under the McCain plan, seriously ill people forced to get their own insurance will be rejected because of preexisting medical conditions.
McCain's answer is to advocate the expansion of state-run high-risk pools, the last refuge for the uninsurable. Critics respond that such pools are notoriously short on money and can't help all who need them. Florida's pool, for example, was closed to new applicants in 1991 for lack of money and now serves a mere 300 people.
Obama emphasizes that anyone who likes his or her present health plan would be able to keep it. He concentrates on helping those struggling to get or keep insurance.
Medicaid for the poor and a state-federal children's insurance program would be expanded.
A new National Health Plan, similar to what's available to members of Congress, would be guaranteed to everyone who wanted it. No one with preexisting conditions could be excluded or forced to pay higher premiums -- a requirement that experts say could cost a lot.
Large employers that didn't offer insurance would have to pay into the fund. Those that did provide coverage would be reimbursed for some costs of employees with catastrophic illnesses.
The plan would allow coverage for many of the uninsured, but critics are deeply concerned about the costs. The Obama campaign estimates that the plan would cost $50 billion to $65 billion a year. That's less than the cost of the AIG bailout and about half of the annual war costs in Iraq.
Health Affairs and others worry that the real expense could be much more -- perhaps two or three times the Obama estimates. The magazine concludes that ``unless the factors underlying cost growth are addressed, the country will be left with more unsustainable spending.''
Irwin Redlener, a Columbia University physician and advisor to Obama, says the Democrat's plan would curtail costs by encouraging such measures as preventive medicine, which can nip illnesses early, before they become expensive emergency-room situations. ``We have a compelling case for affordable healthcare for everyone.''
Even so, Steven Ullmann, director of health-sector management and policy programs at the University of Miami, says funding will be hard to come by. ``When the economy is rolling in money, then you can think about expanded benefits and reform.''
There is still plenty that could be done -- and done quickly -- to improve healthcare and reduce costs, experts say. ''We need to work in steps,'' says Bill Novelli, head of AARP, the organization that represents people 50 and older. ``SCHIP is going to come first. It has to. . . . It's a cliché but true. The children are our future.''
SCHIP, the state-federal program for covering children, is set to expire early next year. Democrats and many Republicans believe the program must be continued, although President Bush vetoed that proposal earlier this year. Both McCain and Obama support SCHIP, although the Democrat wants the program expanded, while the Republican believes it must be limited so that it doesn't add to ``already out-of-control national spending.''
Thompson and many others believe that 2009 will finally see a bill for healthcare information technology, mandating a uniform platform for electronic records, which experts say could save perhaps $150 billion a year by eliminating duplicate tests and reducing medical errors.
Both Obama and McCain support information technology reform. ''It just seems nuts that government is spending half a trillion a year on healthcare and not demanding IT,'' says Andy Stern, president of the Service Employees International Union, which represents two million workers in healthcare, government and property services.
Both candidates agree that billions can be saved by wellness-prevention programs and better management of chronic diseases, which are estimated to account for up to 75 percent of healthcare costs.
Those items, plus IT implementation, formed a mantra repeated by many experts, conservative and liberal, who met at a healthcare conference last month in Orlando. All agree that no reform can work without curtailing costs.
Many believe that a third or more of all healthcare spending in the United States is wasted, noting that Europeans spend half as much per capita as we do and live slightly longer.
http://www.miamiherald.com/living/health/story/721466.html
