2008 Presidential Candidate Health Plans

1. 2008 Presidential Candidate Health Plans Individual Insurance Market with taxed benefits, tax credits and minimal state rules (regulations) v. Group Insurance-public/private mix with premium subsidies and consumer protections (regulations)

2. Health reform critics(Health Affairs September 16, 2008) • McCain Plan “Achieving Senator McCain’s vision would radically transform the U.S. health insurance system…for the nearly 160 million Americans who now receive health insurance through their employers. We estimate that twenty million…would lose current coverage…offset [initially] by an increase in coverage in the nongroup market. The decline of job-based coverage would force millions of Americans into the weakest segment of the private insurance system—the nongroup market—where cost sharing is high and covered services are limited. Senator McCain’s proposal to deregulate this market would mean that people in it would lost protections they now have. These changes would diminish the security of coverage for most Americans, especially those who are not in perfect health.” • Obama Plan “The health reform plan put forth by Senator Obama focuses on expanding insurance coverage and provides new subsidies to individuals, small businesses and businesses experiencing catastrophic expenses. It greatly increases the federal regulation of private insurance but does not address the core economic incentives that drive health care spending…Heavy regulation coupled with a fallback national Health Plan and a play-or- pay financing choice also raise questions about the future of the employer insurance market.”

3. Criteria for 2008 candidate comparison: Access, Cost/Affordability and Quality (McCain/Obama) • How much progress toward universal coverage? (-/+) • Will system costs (prices) come down? (0/0) • How much will people pay for healthcare coverage? (-/+) • Will quality (comprehensiveness and excellence) improve? (-/+)

4. McCain: Key Features • Weaken employer role in health insurance; encourage people to purchase individual coverage in the private market • Remove tax exclusion for employer-sponsored health benefits (i.e. tax employees health benefits as income) and replace with a $2500/5000 tax credit • Deregulate non-group insurance by permitting purchase across state lines • Strategies for efficiency (disease management, IT, liability reform, pricing transparency)

5. Obama: Key Features • Expand insurance coverage and increase regulation of private insurance plans – 5 ways • 1. National Insurance Exchange (individuals can choose plans, minimum benefit package, coverage guarantee, community rated) • 2. National Health Plan (small employers and those with no other access—equal terms for all, subsidies for low income) • 3. Reinsurance for Insurance Providers • 4. Insurance mandate for large employers (pay or play) • 5. Insurance mandate for children (parents’ coverage up to age 25, expand SCHIP • Strategies to improve health status and quality of medical care (chronic disease management, prevention, evidence basis, IT)

6. Key Differences

7. Progress toward universal coverage: reducing the uninsured

8. Obama: Increased coverage immediately Estimates for 2018: 33 Million uninsured McCain: Little change; Decreased coverage over time Estimate for 2018: 65 Million uninsured Universal coverage

9. McCain $ 1.31 trillion Obama $ 1.63 trillion Plan Cost Estimates: 2009-2018

10. Obama: Public funding: Increase (subsidies and SCHIP expansion Overall healthcare costs Little change-- some decrease possible due to increased coverage and efficiencies Out of pocket: Employer or self with public subsidy McCain Public funding: No change initially (taxes on benefits=tax credits) decrease over time Overall healthcare costs Possible increases in insurance costs and actual costs of care due to profit incentives and lack of regulation Out of pocket: Employer or self with tax credit of 2500/5000. Decrease in Costs

11. Obama Mandated benefits and increased coverage should increase continuity and comprehensiveness of care. McCain Erosion in scope of benefits and lack of continuity of care for uninsured should decrease quality. State laws requiring types of coverage will be weakened. Quality

12. Reform Principles

13. Common public complaints • Rate increases for those with health conditions McCain does not address Obama will not allow • Denial of coverage McCain does not address Obama will not allow • Gaps in coverage McCain does not address Obama promises comprehensive coverage

14. Resources • www.commonwealthfund.org The Commonwealth Fund Foundation • www.health08.org Henry J. Kaiser Family Foundation • www.healthaffairs.org The health policy journal, Health Affairs