McCain, Obama offer divergent prescriptions on health care

Health care reform, the issue that many say defined the 1992 choice between George H.W. Bush and Bill Clinton, is back at center stage again this year, and the candidates have sharply divergent plans for it.According to a recent Associated Press-Yahoo poll, 78 percent of voters consider health care a very important issue this year, even as the financial crisis, Iraq and terrorism dominate the daily give-and-take. The U.S. spent $2.1 trillion on healthcare in 2006 and yet has 47 million people uninsured.The proposal backed by Republican John McCain would end the favorable tax treatment of employer-sponsored health insurance for the 156 million people who now have it. It would provide a tax credit for individuals ($2,500) and families ($5,000) as an incentive to purchase private insurance plans. But those who continued to receive employer-based coverage would have its value taxed as income.Democrat Barack Obama's plan would require all children to be insured and employers to offer health benefits or contribute to the cost of a new public program. He would also expand the reach of Medicaid and the State Children's Health Insurance Program (SCHIP), and create a National Health Insurance Exchange for those ineligible for public or employer-based plans.Neither candidate advocates guaranteed healthcare for all paid for by the federal government, or a universal mandate, as some business and healthcare advocacy groups have proposed.At a forum organized by AARP in June, Dr. David Cutler, a Harvard University economics professor and an Obama adviser, said Obama's plan would provide to all the level of care now received by Medicare beneficiaries or federal employees.He said it would lower out-of-pocket costs, employer premiums and the price tag of public health care programs. The cost of the program would be covered by the expiration of high-income tax breaks that McCain wants to extend.According to the Obama campaign, returning to the 36 percent and 39.6 percent income tax rates for the 2 percent of wealthiest taxpayers, restoring capital gains taxes to the higher level of 2000, returning the estate tax with a $7 million exemption, would raise a total of $65 billion a year compared to extending the breaks as McCain suggests.At the same AARP forum, lawyer and health economist Thomas P. Miller of the American Enterprise Institute, a McCain health adviser, said Obama's plan would encourage people to sign up for the public program, which taxpayers would pay for. Obama's approach would also create regulatory burdens for private insurers, while McCain's plan would save people money by giving them more control over their own health care spending through tax credits, Miller said.The tax exemption for employer-provided health care that McCain would end would raise substantial new revenue, experts say. According to a report by the Bipartisan Leaders' Project on the State of American Health Care, underwritten by the Robert Wood Johnson Foundation, the cost of exempting the 10.7 percent of company payrolls that goes to providing health benefits was $208 billion in 2006, or nearly half the cost of Medicare.Beyond the broad outlines of both plans, each candidate handles a variety of specific issues differently. McCain would work with the states to create a Guaranteed Access Plan for people denied insurance coverage because of "pre-existing conditions." And he would promote competition by allowing insurance to be sold across state lines.Obama's plan would provide tax credits to small businesses that provide health insurance to their employees. It would offer income-based subsidies to help people buy into qualified insurance plans. And it would require participating insurance companies to guarantee coverage to all regardless of health status.While some critics of Obama's plan call it "government-run," an AARP survey indicates that those aged 50-64 with private health insurance, while generally satisfied with their care, are not as satisfied as those 65 and older on government-sponsored Medicare. Studies show that those without insurance are typically sicker by the time they resort to emergency rooms. Their care is ultimately borne by all.According to a side-by-side comparison of the plans by the Henry J. Kaiser Family Foundation, a non-partisan health care research group:-- Both candidates would invest in modern electronic record keeping technologies, but Obama would require the use of Health Information Technology (HIT) for participants in his plan while McCain would let the market create an HIT infrastructure.-- Both would spend more on educating people with chronic illnesses, and increase funds for cancer research and screenings. Both support stem-cell research and the re-importation of prescription drugs. And they both favor medical malpractice reforms.-- Obama's plan would extend the Family and Medical Leave Act to employers with 25 or more employees, from the current 50 or more. McCain would not make a change.-- Obama would invest in research on gender and health disparities, while McCain's plan does not address the issue.Critics, such as Princeton University economist and recent Nobel Prize winner Paul Krugman, say McCain's plan would be a boon to insurance companies. But they also acknowledge it would reduce the 16 percent of the population currently uninsured.They also contend that McCain's plan might encourage employers to drop employee health benefits. That could mean that those who are paying on average $3,300 of the $12,100 actual cost of the employer-based family plans would have to make up the difference between the $5,000 McCain tax credit and the actual cost of private health insurance.The American Cancer Society asked both candidates a series of questions, including one on which the candidates' positions sharply diverged. Both are in favor of increasing medical research on cancer and would find new ways to encourage screenings.But asked if they would "substantially raise the federal tobacco tax to improve public health," McCain's campaign said he had no such plans. Obama's campaign said that the Illinois senator had been "an ardent supporter" of SCHIP, "which included a significant increase in the federal tobacco tax."The expanded tobacco tax program was vetoed by President Bush. SCHIP was later extended in its present form through March of next year.(E-mail Scripps Howard News Service reporter Bartholomew Sullivan at sullivanb(at)shns.com)(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)