Republican, Democratic Health Care Plans Differ on Direction for Health Care Reform

The Republican and Democratic health care plans offered up by the presidential candidates differ sharply in their approach to health care reform, revealing a deep philosophical divide that has made health care one of the most contentious issues in this year's presidential campaign.

The health care reform plan of Sen. John McCain, R-Ariz., which is based on three principles -- no mandates on business, no mandates on individuals and no new taxes -- relies heavily on the market for success. It would provide a series of tax credits to make health care more affordable and accessible. It also would allow insurance companies to sell their products across state lines in an attempt to deregulate and foster competition in the insurance marketplace, according to analysts interviewed by AAFP News Now.

McCain's plan would provide a tax credit of $2,500 for individuals and $5,000 for families to help them purchase insurance policies on the open market. At the same time, it would eliminate tax exclusions for employer-sponsored health insurance, which may discourage employers from offering heath insurance to individual employees. This represents a dramatic and fundamental change from the current system of employer-based health coverage.

"(McCain's) view is you will do better purchasing insurance rather than getting it through your (employer)," says Robert Blendon, Ph.D., professor of health policy and political analysis at the Harvard School of Public Health in Boston. McCain, he says, has a "strong emphasis on encouraging market competition and encouraging individuals to be good shoppers in the marketplace."

Unlike the health care reform plan proposed by Sen. Barack Obama, D-Ill., the McCain proposal is more concerned about offering an array of insurance options at a lower price than providing universal coverage, one of the most fundamental and telling differences between the two plans, analysts say.

"There is no question that Sen. McCain will increase the number of people who have insurance," says Blendon. "But there is almost no estimate to suggest that it would cover the bulk of the 45 million without coverage."

McCain has repeatedly vowed to not raise taxes if elected, a pledge repeated by his vice presidential running mate, Gov. Sarah Palin of Alaska. (The McCain campaign did not respond to repeated requests for an interview.) "Lower taxes is not a way to get universal coverage," says Blendon. "Someone has to pay to cover people."

Obama's plan, by contrast, calls for universal health care coverage by the end of his first term. The Obama plan would require large employers to offer employee health benefits or contribute to the cost of a new national health plan, or NHP. It also would create a national health insurance exchange to give small businesses and individuals without access to other public programs or employer-based coverage the opportunity to enroll in the NHP or a government-approved private plan. The national health insurance exchange would be based on the federal employee health benefits plan.

"First and foremost under Senator Obama's plan, if you like your health care, nothing changes," says Neera Tanden, domestic policy director for the Obama campaign. "We essentially build on the system that exists today. We strengthen and reform it, but we don't radically alter it."

The Obama proposal does not require adults to carry insurance, but it mandates insurance coverage for children, meaning adults would have to enroll their children in a public or private plan.

"Senator Obama emphasizes government regulation of the private insurance market, arguing that you need government regulation … to make it work and make it safe," says Blendon.

Obama's plan encourages people to obtain insurance through their employers, but if individuals do not have access to employer-sponsored health plans, they can purchase insurance coverage through large purchasing groups that the federal government helps establish.

"Obama is at the other end (of the spectrum from McCain) saying, 'The best protection for you is not going out yourself and buying insurance, it is being a part of a large group pool where you will get better rates,'" says Blendon.

Len Nichols, Ph.D., a health care economist and director of the health policy program for the New America Foundation, a think tank created to promote bipartisan solutions to problems, says the McCain and Obama plans are more like impressionistic watercolor paintings than actual photographs or blueprints. The two proposals convey visions, not concrete plans, he says.

"The McCain plan reflects the vision that it is a social responsibility to make sure everyone has a choice, but that it is not the government's responsibility or a social responsibility to make sure everyone is covered," explains Nichols. "Obama's plan reflects the vision that it is our social responsibility to make sure everyone has access to affordable coverage."

These divergent visions give voters a clear choice on the issue of health care -- perhaps the starkest choice of any issue in this year's presidential campaign. "If you are a voter and you say, 'I don't want a lot more spending, period,' McCain is your candidate," says Blendon. "If you say, 'I want a lot more spent on health care for the next four years,' Obama is your candidate."

There are concerns that other issues will overtake health care reform as a top priority in the election, pushing it to the back burner and making it a secondary consideration for the next administration. In fact, according to recent polls, health care reform has fallen behind the economy and gasoline prices in importance to voters. This will push health care reform to the side to a certain extent, predicts Blendon.

"I think there will be some bill (in Congress) called health reform, but that bill is not going to solve all the problems that professional groups discuss at their meetings," says Blendon.

Nichols is convinced that the escalating cost of health care will continue to make reform a priority, mandating action on the part of the federal government and paving the way for fundamental changes.

"The reason we are having this conversation as a nation is because health care costs too much for middle-class families, and that is not going away," says Nichols. "Employers are very worried about international competition and the amount of potential investment we spend on health care every year."

Health care spending now consumes 17 percent of the median family income, a jump of 10 percent during the past several years, Nichols says.

"The middle class is worried about paying for health care in a good economy," says Nichols. "But in a bad economy, it is even worse; and employers are saying, 'My God, I have to move jobs overseas, or I cannot compete.' The cost of doing nothing is really high."