Later On

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Health plan differences

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Three different health plans from the three candidates:

…  The different proposals among the candidates — and in Washington — boil down to three issues: Who gets health insurance, how should they get it and who pays.Clinton’s and Obama’s plans are similar in many ways, but they disagree on at least one key point: Clinton would require all people to have insurance. Obama would only require parents to have coverage for their children.

McCain would emphasize tax credits to help purchase health coverage and not require anyone to have insurance.

Blendon says that to cover a large share of the uninsured, the Democrats are “willing to consider laws that require most businesses to offer insurance to employees and at least require all parents to have insurance coverage for their kids.”

The Republicans, he says, “are more focused on getting people who have insurance lower-cost options … including helping people who buy their own insurance to have more choices.”

Laszewski, president of Health Policy and Strategy Associates, a Washington, D.C.-based consulting firm that works with insurers, hospitals and drug companies, says, “Either one could work,” but both options face hurdles.

For example, Massachusetts — where some people still can’t afford coverage — shows that “you can get a lot (of people) covered, but you can’t get everyone covered,” he says. Laszewski also sees flaws in McCain’s push for tax credits to help buy coverage.

“How will they make health insurance affordable for the oldest and sickest with one standard tax credit?” he asks. A tax credit could help younger, healthier people buy coverage, but it might not be enough for older people or those with health problems, he says.

Clinton and Obama want insurers to sell coverage to all who apply. That would change many state laws, which allow insurers who sell policies to individuals to reject those with medical conditions ranging from hay fever to cancer.

More than 18 million people buy their own insurance because they are self-employed or their jobs don’t offer it, according to America’s Health Insurance Plans, the industry’s lobbying group.

Len Nichols, an economist at the New America Foundation, a centrist think tank in Washington, says without a mandate for everyone to get insurance, some people would wait until they are sick to buy coverage. That would deprive insurance companies of premiums paid by healthy clients that offset costs of treating the sick.

McCain says too many rules already govern insurance and are driving up costs. To reduce insurance regulations, McCain’s proposal would allow consumers to shop for lower-cost insurance in any state, not just where they live — a change from most state laws.

Offering tax credits to buy health insurance, as McCain supports, would change how most Americans pay for coverage.

Currently, workers in the 60% of companies that offer health insurance get those benefits tax-free. McCain and many Republicans say tax-free benefits are unfair to those who don’t get coverage through their jobs and can’t deduct insurance costs unless they are self-employed.

Under McCain’s plan, job-based insurance would be taxable income. For a worker whose employer-offered family plan now costs an average $12,000 a year, that would mean a tax increase of $3,360, if in the 28% bracket.

McCain wants everyone to get a tax credit — $2,500 for singles or $5,000 for families — to either buy a health policy or offset the taxes on coverage through work.

Laszewski warns that for older or sicker workers, especially those buying coverage on their own, a policy could cost far more than the tax credit.

Len Burman, director of the centrist Urban-Brookings Tax Policy Center, says McCain’s plan would improve the current system because it offers low-income residents a refundable tax credit to buy insurance. He also says that tax credits could likely lead some employers to drop health coverage.

Clinton and Obama want most Americans to keep getting coverage through their jobs. Large employers that don’t offer health plans would have to contribute to the cost of covering their employees under Clinton’s plan. Obama wants big companies to pay into a public fund for health care.

Both Democrats also want to open new ways to buy coverage, possibly through a system similar to one that covers federal workers and includes a variety of benefits.

Numerous efforts to revamp health care have failed since Democrat Harry Truman’s administration in the 1940s. The last major push was during President Bill Clinton’s first term in 1993-94. Hillary Clinton led a task force that called for universal health coverage to overhaul the nation’s health care system, but the complexity of the plan and industry opposition doomed it in Congress.

“Two huge things are different now,” New America’s Nichols says. First, premiums have shot up, he says. Second, U.S. companies are increasingly competing with firms in other countries where health insurance is rarely offered, such as China or India, he says. That means U.S. employers pay for benefits, while their competitors don’t.

Controlling rising costs could prove to be the hardest, although all three presidential hopefuls say their plans would do that.

Thompson, the former health secretary, says both parties agree on two ways to hold down costs. One is to promote technology, such as electronic medical records, to increase efficiency. The other is to streamline care for millions of Americans who have chronic illnesses, such as diabetes and asthma. Early care for those patients could reduce expensive hospital stays or other avoidable complications.

Many economists, including Paul Ginsburg of the Center for Studying Health System Change, say tougher measures may be needed to put a dent in health care spending, which topped $2.1 trillion in 2006 — 16% of the economy.

Harder-hitting measures, such as limits on new medical treatments until proved effective, wouldn’t be well received.

“No one has a frontal assault on health care costs because that is somewhere between politically unpopular and political suicide,” says Kaiser’s Altman.

None of the candidates is proposing a government-run health system like in Canada or Great Britain. “A one-size-fits-all, big government takeover” isn’t the answer, McCain says.

Clinton says her proposal is “not a government takeover of health care.” She would, as one option, allow people to enroll in a plan similar to Medicare.

Obama says the government should control “skyrocketing profits of the drug and insurance industries,” but should not change coverage for millions of Americans who get insurance through work.

Analysts disagree on whether any changes will succeed. Thompson says that “2009 will be the biggest successful year in the transformation of health care that we have seen since the passage of Medicare and Medicaid in the 1960s.” Harvard’s Blendon, however, foresees “a huge stalemate” except around the issue of covering more children, unless there is a sweep of Congress by one party.

Blendon says the two parties are so far apart on solutions — and have become so polarized — there is little common ground.

“There used to be a sense of a moderate middle that shared some of the values and concerns of each party,” he says. “Now there are not a lot of people in the middle.”

Written by Leisureguy

26 March 2008 at 10:04 am

Posted in Election, Medical

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