Candidates' Health Plans Differ Greatly

As national elections are rapidly approaching, Senator John McCain and Senator Barak Obama have each proposed individually crafted health plans. Although pundits claim that neither proposal would correct all aspects of the current health care crisis, each candidate believes that his respective plan would be an important step in the right direction. Here are brief outlines of each candidate's proposals:

Sen. John McCain (R-Ariz.). At the heart of Sen. McCain's health proposal is a plan to eliminate the tax exclusion that allows employees to avoid paying income tax on the value of their health benefits.

Sen. McCain, the Republican presidential nominee, is proposing to replace that tax break with a refundable tax credit of $2,500 for individuals and $5,000 for families. For those who remain in their employer-sponsored plan, the tax credit would roughly offset the increased income tax burden. For those seeking to buy their own health coverage on the individual market, the tax credit would be used to pay their premiums, according to Sen. McCain's plan.

Sen. McCain also espouses creating a national market for health insurance by allowing Americans to buy coverage across state lines. Insurance companies could no longer take your business for granted, offering narrow plans with escalating costs, Sen. McCain said during the Tampa speech announcing details of his proposal. It would help change the whole dynamic of the current system, putting individuals and families in charge, forcing companies to respond with better service at lower cost.

For those with preexisting conditions , Sen. McCain is proposing a Guaranteed Access Plan.

The GAP would reflect the best practices of the more than 30 states that have a "high-risk" pool for individuals who cannot obtain health insurance. Sen. McCain pledged to work with Congress, governors, and industry to ensure the initiative was adequately funded and included disease management programs, individual case management, and health and wellness programs.

The tax changes would not occur in a vacuum, said Crystal Benton, a spokeswoman for the McCain campaign. The idea is to reform the marketplace and drive down costs overall.

Senator Barack Obama (D-Ill.). The centerpiece of Sen. Obama's plan is a public-private system that would allow people to remain in their employer-sponsored health plans while offering the uninsured the chance to purchase either a private or government-sponsored plan.

For the government-sponsored plan, the proposal uses as a model the Federal Employees Health Benefits Program--the system available to federal employees and members of Congress. For individuals and families who want to purchase insurance on the private market, Sen. Obama is proposing to create a National Health Insurance Exchange through which they could enroll in either the new government-sponsored plan or purchase a private plan. All plans offered through the exchange would be required to offer at least the same coverage as the government-sponsored plan and adhere to the same standards for quality and efficiency.

Employers also would have a role to play under the Obama plan. Those employers that do not offer or contribute to employee health coverage would be required to pay a percentage of their payroll toward the cost of the government health plan. There would be an exemption for some small employers under the proposal.

The Obama proposal also calls for expanding eligibility for Medicaid and the State Children's Health Insurance Program. Under the proposal, the government would offer subsidies to individuals who do not qualify for Medicaid or SCHIP but still needed financial assistance to purchase health insurance.

Sen. Obama also would guarantee that no American could be turned down for health insurance because of illness or a preexisting condition. However, his proposal stops short of requiring all Americans to purchase coverage. Instead, the plan mandates coverage for children only.

The other half of Sen. Obama's plan is aimed at reducing premiums and decreasing overall health system costs. For example, he would target the catastrophic health expenses that account for a significant portion of the costs incurred by private payers.

Under his plan, the federal government would reimburse employer-sponsored health plans for a portion of the cost of catastrophic health events above a certain threshold. In exchange, the plans would have to use the savings to reduce the cost of premiums.

The candidate proposes to spend $10 billion a year for the next 5 years in an effort to encourage widespread adoption of electronic health records. The investment would reap savings through increased efficiencies since paper records are more costly to store and process than are electronic ones, according to the Obama campaign.

This is one similarity between the plans, for McCain has also come out in favor of increasing the use of electronic health records.

The Obama plan also seeks to control costs through greater regulation of insurance companies and by allowing the federal government to negotiate drug prices.

The Obama campaign estimates that, if implemented, the reforms they are proposing would save the average family about $2,500 a year in medical expenses