NorthJersey.com

McCain, Obama Diverge Radically On Health Care

The Record (NorthJersey.com) — Wednesday, October 22, 2008

BY BOB GROVES
STAFF WRITER

Health insurance, a costly need that haunts millions of Americans, is pitting the 2008 presidential candidates against each other along primal political lines.

Republican John McCain and Democrat Barack Obama have radically different plans for making sure people in New Jersey and the nation can afford insurance. McCain favors tax credits, more choices and health savings plans. Obama would mandate coverage for children and have more government involvement in the insurance industry.

Their health proposals also deal with Medicare, prescription drugs and other issues. But insurance dominates the discussion, particularly in New Jersey, where 1.3 million residents are uninsured.

In the final debate last week, Obama described it as "the issue that will break your heart over and over again."

He recalled meeting two uninsured middle-aged women in Toledo, Ohio, who had been laid off. "They were desperate for some way of getting coverage, because, understandably, they're worried that, if they get sick, they could go bankrupt," Obama said.

Health insurance is "a terribly painful situation for Americans," McCain said. "They're seeing their premiums, their co-pays go up. ... It really is the cost, the escalating costs of health care that are inflicting such pain on working families and people across this country."

Up to 47 million Americans are uninsured, and many more are underinsured or struggling to pay their premiums.

Competing plans

McCain's proposal calls for replacing tax breaks for employers who offer health plans with tax credits for Americans. Individuals would get $2,500 and families would receive $5,000 to buy insurance on the open market. His plan allows people to purchase insurance across state lines, and he relies on market forces to drive down the cost of insurance.

McCain would encourage the use of health savings accounts. He also wants to set up a "guaranteed access plan" to assure access to health coverage for high-risk patients with pre-existing conditions. The overall plan is estimated to cost about $10 billion.

While McCain believes the marketplace can be made to accommodate nearly everyone, Obama thinks the government should insure more people.

Obama calls for universal coverage through a mix of federal and free-market funding. He would mandate health insurance for all children and would create a public program for the uninsured. His plan would offer small businesses a refundable tax credit of up to 50 percent on premiums paid by business for employees. The plan, put at about $65 billion, would be financed by cost-cutting and rescinding tax breaks for people earning more than $250,000.

Essentially, Obama says health care is a right; McCain says it's a personal responsibility.

'Disastrous'

Peter A. Feldman, a spokesman for the McCain campaign in New Jersey, said Obama's plan for universal coverage, would be "disastrous, providing Americans with fewer choices and more anemic coverage." Obama's government-run health plan would cost $243 billion a year — $3,000 a year for American families, Feldman said.

"The apparent goal is a complete government takeover of the health care system," Feldman said of the Obama plan.

The biggest opposition in New Jersey to the McCain plan has come from New Jersey Citizen Action, a watchdog coalition.

McCain espouses a "you're on your own" approach to health care, said Eve Weissman, a spokeswoman for the group. Up to 27 million Americans — including almost 673,000 New Jerseyans — could lose their employer-sponsored health insurance under the McCain plan when employers lose their tax exemption for providing benefits, according to a report cited by Citizen Action.

McCain's deregulation of the private health insurance market would let insurers locate in states with minimal constraints compared with New Jersey, she said.

"This offers a bleak picture for New Jerseyans forced to buy insurance in the individual market where the costs are astronomical, far exceeding what the average family can afford," she said.

'Sticks it to N.J.'

Joel Cantor of Rutgers University agreed. "It's a back door to deregulating health insurance and letting insurers mainly sell polices to healthy people and exclude the sick," said Cantor, director of Rutgers' Center for State Health Policy. "That sticks it to New Jersey," whose strict regulations protect consumers, he said.

But he also has questions about Obama's plan. "Many details are missing," Cantor said.

The New Jersey Hospital Association, meanwhile, would like the candidates to talk about charity care that hospitals provide to indigent or uninsured patients, said Betsy Ryan, president of the group.

"The uninsured problem hits everyone; in New Jersey, it's exacerbated," she said. "By state law, we take all comers, which we want to do, but we just want to be paid fairly for it."

The National Hospital Association could lobby for more help, but that would be premature until after the election, Ryan said. "We'll hold our fire until we see a new president and a bill," she said.

The New Jersey Business and Industry Association has reservations about both candidates' plans.

About Obama's government-run coverage: "Most businesses don't view government as the answer to their problems," said Christine Stearns, a spokeswoman.

On the other hand, McCain's proposed changes to the tax code could affect employers, Stearns said.

"The cost of health care has continued to grow, almost out of control, an almost 100 percent increase in the past eight years," she said. "It's driving people out of the market."

Great challenge

Obama and McCain agree on one fundamental thing: "That the system is pretty screwed up," said David Mechanic, director of the Rutgers Institute for Health, Health Care Policy and Aging Research. "But neither deal with the tremendous cost problems in the future. There's no way you can finance everything people want.

"There's not a chance in the world these plans will be adopted," if they don't have the votes in Congress, he said.

"Everybody agrees the system is a disaster and needs reform," he said. "How to accommodate [all the issues] is the big challenge for whoever gets into office."

Where They Stand On Health Care

Health insurance

McCain: Wants to provide tax credits of $2,500 to individuals and $5,000 to families to purchase insurance. His plan guarantees access to coverage for high-risk patients, allows workers between jobs to buy cheaper policies and promotes tax-exempt health savings accounts and retail walk-in clinics. Would allow people to purchase insurance across state lines. McCain opposes mandated coverage.
Obama: Plans to mandate coverage for all children and provide universal health care through government and market sources. He wants to expand Medicaid and the State Children's Health Insurance Program and create a new National Health Insurance Exchange for the uninsured. Would offer a 50 percent tax credit to small businesses on premiums for employees.

Medicare

McCain: Reform Medicare/Medicaid to pay for diagnosis, prevention and care coordination, but not for preventable medical errors or mismanagement.
Obama: Would allow federal government to negotiate with drug companies for lower prescription drug prices under Medicare Part D. Also intends to reduce the number of Part D plans.

Preexisting conditions

McCain: Create limited guaranteed access plan for those who are denied coverage.
Obama: Prohibit insurers from denying coverage.

Medications

McCain: Would allow consumers to safely import prescription drugs and make generic drugs more available.
Obama: Supports import of safe drugs and quicker sale of generic drugs.

Mental health

McCain: Offer affordable, quality treatment of mental illness.
Obama: Provide behavioral health and chronic care for all who need it.

Information technology

McCain: Promote IT to lower costs and allow doctors to practice across state lines.
Obama: Invest $50 billion and federal funds in electronic medical records and other IT.

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