Presidential candidates John McCain and Barack Obama offer approaches to
health system reform that are distinctly different—but both also leave
major unanswered questions about how they would achieve what they propose.
Obama proposes creation of a national health insurance plan similar to the
Federal Employees Health Benefits Program (FEHBP) that would be available to
all Americans, including the self-employed and employees of small businesses.
Coverage would be guaranteed by prohibiting participating insurers from
rejecting people because of a preexisting illness.
John McCain (left) and Barack Obama offer starkly different versions of
health system reform. McCain proposes market-based initiatives designed to
increase the buying power of individuals, while Obama proposes greater
public-sector involvement and insurance regulation.
Both candidates have spoken positively about parity for treatment of mental
illness, but Obama's proposal as it appears on the candidate's Web
site is unique in explicitly supporting parity; the FEHBP—the model for
Obama's national plan—offers parity coverage of mental illness.
McCain does not have a stated position on parity.
Other features of Obama's proposal are a plan to require employers who
do not offer health insurance to contribute a percentage of payroll toward the
costs of the national plan and creation of a health tax credit of up to 50
percent on premiums paid by small businesses on behalf of their employees.
McCain emphasizes changes in the tax treatment of employer-sponsored health
benefits and federal subsidies for individuals to buy insurance, increased use
of health savings accounts, and expansion of the private insurance market by
allowing individuals to purchase health insurance across state lines and
through organizations and associations other than employers.
McCain proposes a tax credit of $2,500 for individuals and $5,000 for
families to offset the cost of insurance. Those obtaining insurance that costs
less than the credit "can deposit the remainder in expanded health
savings accounts," according to the McCain for President Web site.
He also proposes to work with states to develop a "guaranteed access
plan" for those with chronic illness. "One approach would
establish a nonprofit corporation that would contract with insurers to cover
patients who have been denied insurance and could join with other state plans
to enlarge pools and lower overhead costs."
In an article comparing the candidates' plans in the August 21 New
England Journal of Medicine (NEJM), Jonathan Oberlander, Ph.D., wrote
that the McCain and Obama plans are fundamentally a contrast between
market-based initiatives designed to increase an individual's buying
power (McCain), and increased public-sector involvement and insurance
"Currently, workers do not pay taxes on health insurance premiums
paid by their employers," Oberlander wrote. "The McCain plan would
eliminate this tax exclusion and use the revenue generated—projected to
be $3.6 trillion over 10 years—to pay for refundable tax credits for
Americans obtaining private insurance ($2,500 for individuals, $5,000 for
families). Uninsured Americans could use their credits to help buy insurance
coverage on the individual market, and workers with employer-sponsored
insurance could use theirs to offset the cost of paying taxes on their
employers' premium contributions or to purchase coverage on their
"In contrast to John McCain's emphasis on markets and
deregulation, Barack Obama's reform plan relies on an employer mandate,
new public and private insurance programs, and insurance-market
regulation," Oberlander wrote. "The core of the Obama plan is a
requirement that employers either offer their workers insurance or pay a tax
to help finance coverage for the uninsured.... The Obama plan would also
create two new options for obtaining health insurance: a new government health
plan (similar to Medicare) and a national health insurance exchange.... And
private insurers could not deny coverage because of preexisting conditions or
charge substantially higher premiums to sick enrollees: the Obama plan would
end medical underwriting according to health status."
Oberlander is an associate professor of social medicine and of health
policy and administration at the University of North Carolina, Chapel Hill.
The NEJM article is titled "The Partisan Divide—The
McCain and Obama Plans for U.S. Health Care Reform."
Health policy experts agreed that like much campaign rhetoric, both
candidates' proposals offer rosy pictures that lack crucial details.
"Both McCain's and Obama's proposals are at a level of
abstraction that makes it hard to know how they would immediately affect
patients and psychiatrists," APA past President Steven Sharfstein, M.D.,
chair of APA's Ad Hoc Task Force on Health System Reform, told
Psychiatric News. "But it is quite important for both
candidates to address the issue of parity and to acknowledge that there is no
reason for discriminatory provisions when it comes to psychiatric illness.
That should be the gold standard for American psychiatry—that we are
treated no different than the rest of medicine."
Among the details missing from Obama's proposal, for instance, is the
cost of his plan.
"It's going to be expensive getting all those people
covered," said Aaron Carroll, M.D., M.S., an associate professor of
pediatrics and director of the Center for Health Policy and Professionalism
Research at Indiana University School of Medicine.
Carroll noted that the concept of guaranteed access strikes at the very
heart of for-profit insurance, and that Obama's plan does not include a
mandate for individuals to buy insurance.
"Health insurance companies make money by covering healthy people,
not by covering sick people—that's how it works," Carroll
told Psychiatric News. "If you force them to take all comers,
it's difficult to see how they would accept that.
"And by not enforcing a mandate on individuals to buy insurance, the
plan ignores the fact that insurance works by taking money from the well and
giving it to the sick. If you don't require healthy people to get
insurance, you have a pool only of the sick."
Neither has Obama specified what the eligibility limits would be on his
proposed expansion of Medicaid and the State Children's Health Insurance
Likewise, Carroll said that McCain's emphasis on tax credits and
health spending accounts (HSAs), while possibly lowering the costs of
insurance for some individuals, does little to address overall health
"The problem is that HSAs aren't really going to do much in
terms of cost containment," Carroll said. "The vast majority of
health spending in this country is done by very few people, who are
chronically ill. They have no choice in how much they spend, so a health
savings account will do nothing for them. Health savings accounts are great if
you are healthy, but they don't do much for you if you are
Of McCain's plan for creating a guaranteed access plan, he said,"
How that will be accomplished is not mentioned at all."
The missing details in both candidates' plans may also reflect the
difficulty of solving the health care dilemma, a problem that has vexed
American public policy for three decades. And policymakers are haunted by the
failure of the Clinton health care proposal in the 1990s, a proposal that
might be said to have died from the weight of its own extraordinary
Still, many policy analysts believe the twin mounting problems of cost and
lack of access make some kind of reform inevitable. "I think you would
be hard pressed to find anyone who says there isn't a problem,"
Carroll said. "Everyone knows we have to do something."
He added that for all the attention paid to the candidates' proposals,
it will be neither McCain nor Obama alone who will reform American health
care. "We focus on the candidates' proposals as if those are the
plans we will have to engage, but we shouldn't forget that it's
Congress that has to pass a bill," he said.
"The McCain and Obama health plans," wrote Oberlander,"
are best viewed as sketches rather than finished portraits, with many
important details yet to be revealed."
Information on Obama's health care proposal is posted at<www.barackobama.com/issues>.
Information on McCain's proposal is posted at<www.johnmccain.com/Informing/Issues/19ba2f1c-c03f-4ac2-8cd5-5cf2edb527cf.htm>."
The Partisan Divide—The McCain and Obama Plans for U.S. Health
Care Reform" is posted at<http://content.nejm.org/cgi/content/full/359/8/781>.▪