Candidates' Health Care Plans: Private Vs. Public

McCain and Obama
Gabriel Bouys/Emmanuel Dunand/AFP/Getty Images

Comparing The Plans

McCain: He would replace the current tax-free status of health insurance coverage provided by employers with refundable tax credits worth $2,500 for individuals and $5,000 for families to help purchase insurance. McCain would allow the sale of insurance policies across state lines, rather than state by state, as is currently the case.

Obama: He would create a new plan for those who lack other access to coverage, as well as a National Health Insurance Exchange to help pool the purchasing power of small businesses and individuals. Obama would also offer a combination of subsidies and tax credits to help make coverage more affordable. He would mandate health insurance coverage for children, but not adults. Obama would create a federally sponsored health insurance plan, similar to Medicare, that would compete with private plans for those under age 65.

Health care has fallen from its status as the top domestic issue in this year's presidential campaign, but that doesn't mean voters no longer care.

A poll released last week found more than 80 percent of those surveyed think the nation's health care system needs fundamental change. Both Arizona Sen. John McCain and Illinois Sen. Barack Obama are promising that, but change is really the only feature their plans have in common.

McCain and Obama have very different prescriptions for solving the problem of ballooning health care costs, says Jonathan Oberlander, a professor of health politics and policy at the University of North Carolina at Chapel Hill.

"There are many issues where Obama and McCain differ," he said. "I'm not sure there's any issue where they differ as much as this. Sometimes we complain in politics that Democrats and Republicans run to the center, and they copy each other with their proposals. At least in health care, we don't have to worry about that."

McCain's Plan

Of the two candidates, McCain is arguably the one whose plan would change the health system the most. Right now, if you get insurance from your employer, you don't pay taxes on the value of that benefit.

But if you have to buy your own insurance and you're not self-employed, you don't get any tax help. McCain would change that: He'd make employer-provided insurance taxable, but then give everyone a tax credit.

"Our proposal is to give every family in America a $5,000 refundable tax credit, and they take that tax credit and that money — a refundable tax credit — to go across state lines, to go any place in America, and go online, and pick out the insurance policy they want," McCain said.

There are lots of questions about McCain's plan. How hard will it be for people who are already sick to buy insurance? Will people really be able to find policies they can afford when the average family policy now costs more than $13,000? And does the public really want to move away from a system in which employers provide most people's health insurance to one where most people buy their own?

But McCain says in the end, there's one main reason he wants to move in the direction he has chosen.

"I want the families to make the choices," he said. "[Democrats] want the government to make the choices. That's a fundamental difference."

Obama's Plan

What Obama is proposing isn't really government-run health care. It doesn't even have a requirement for individuals to have coverage, like the plans offered by his main Democratic primary opponents, former North Carolina Sen. John Edwards and New York Sen. Hillary Clinton.

Obama says that under his plan, if you already have insurance you like, you can keep it.

"But if you're one of the 45 million Americans who don't have health insurance, then you will have it available to you. No one will be turned away because of a pre-existing condition or illness," Obama said. "Everyone will be able to buy into a new health insurance plan that's similar to the one that every federal employee from a postal worker in Iowa to a congressman in Washington currently has for themselves."

If you can't afford coverage, you'll get a subsidy. Employers would have to offer coverage to their workers, but they'd get government help, too.

Comparing The Candidates' Plans

Oberlander says the McCain and Obama plans would essentially move the system in exactly opposite directions.

"While Sen. Obama wants to build on top of the employer-sponsored insurance system, Sen. McCain wants to build away from it and move more people to the individual insurance market," he said.

In fact, says Oberlander, in many ways the current debate reminds him of the movie Groundhog Day — except he keeps waking up and thinking it's 1992.

"The stock Democratic health reform solution, before Bill Clinton changed it, was a play-or-pay employer mandate, and that's exactly what Barack Obama has," Oberlander says. "And in 1992, the favorite GOP solution was tax credits to buy private health insurance. So, a lot of things have happened in 16 years; the health care system is much worse than it was, but we pretty much have the same solutions that we've always had."

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