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McCain, Obama offer very different health care plans

BY ELIZABETH MOORE | elizabeth.moore@newsday.com

October 9, 2008

It would be hard to come up with two more starkly different approaches to reforming American health care than those advanced by presidential nominees John McCain and Barack Obama.

Obama wants to build on the existing system of employer-sponsored health care by creating and expanding government-sponsored insurance programs until everyone who wants coverage has it. He would mandate that all children be covered and that all large businesses provide coverage or pay toward public insurance plans.

McCain, by contrast, would upend the current employer-based system and stimulate the free market to create more affordable coverage for everyone. He would do that with a new tax credit of $2,500 for individuals and $5,000 for families to be applied to the cost of a health insurance policy. The 177 million people now covered by employer-sponsored health care would see those benefits taxed as income.

Gail Wilensky, an economist and former head of the federal Health Care Financing Administration and now a McCain campaign adviser, said the current system of excluding employee health benefits from income tax amounts to an "inequitable subsidy" that benefits affluent corporate employees at the expense of lower-income and self-employed Americans.

McCain's tax credit, she said, would offset income tax hikes for all but the wealthiest Americans, making it possible for more uninsured people to buy coverage.

But McCain's idea is stirring little enthusiasm among the country's leading business groups.

"We are concerned that some employers, particularly in this economy, might be motivated to exit the system," said R. Bruce Josten, executive vice president of the U.S. Chamber of Commerce.

Dr. Irwin Redlener, a professor at Columbia University's Mailman School of Public Health and a longtime adviser to Sen. Hillary Rodham Clinton who now backs the Obama plan, noted that more than 5,000 physicians have come out in support of Obama's plan.

"Doctors are traditionally very conservative and very Republican, but I think once McCain's plan came out ... that was the last straw and the tipping point for a lot of doctors," Redlener said.

The McCain campaign, however, says the Obama plan would bring government-run health care, which will impose higher taxes on employers.

Debate is heating up over how to pay for the plans.

To pay for his proposal, McCain would attempt to wring savings from Medicare and impose a moratorium on new discretionary spending.

Obama says he will pay for his plan by ending the Bush tax breaks on those earning more than $250,000 and squeezing more efficiency out of the health care system.

Expect to hear more on all this: Nationally, health care is now surpassed only by the economy in importance for the independent voters the candidates are wooing, a Kaiser Family Foundation poll found.

A new Marist poll finds 78 percent of all voters think even if it requires going into hock, now is still the time to fix what's broken in the U.S. health care system.