Two Roads Diverge in Health Care Reform: Which is More Radical?

John Goodman, an unpaid advisor to the McCain campaign, writing in the Wall Street Journal on July 30th, has asserted that McCain's health care reform proposal is a much bolder and more transformative proposal than Obama's.

According to Goodman, the McCain proposal, which would replace a tax break for employees who receive health insurance from employers with a refundable tax credit of as much as $2,500 for individuals and $5,000 for families to purchase private coverage, "would completely replace" the current health care system with a "fairer, more efficient system with a much better chance of insuring the uninsured and controlling health costs at the same time." In contrast, "Obama would leave" the current health system -- which is "extremely arbitrary" and "wasteful" -- "largely intact," he adds.

Let the debate really begin now. During the primary season, the focus was on the differences between Obama and Clinton. Those differences were relatively minor. The differences between Obama and McCain's proposals are, indeed, substantial, but not the way Goodman suggests.

The Kaiser Family Foundation compares the two candidate proposals in a nice concise table. The differences are easy to see. The two candidates reflect the philosophy of their parties -- McCain trusts the market to be the engine of reform; Obama does not reject market forces but builds in certain regulatory requirements meant to compensate for market failure.

McCain supports tax credits and tax reform, removal of the tax advantages for employer-sponsored health insurance, increased individual responsibility for the purchase and maintenance of health insurance, and market forces to encourage competition. These are not insignificant changes -- they would most likely eliminate the employer role in health insurance over time, and they shift responsibility for buying and monitoring health care from government and employers to individuals. But there is little chance that these changes would help the uninsured. Elizabeth Edwards has been among the most outspoken critics of McCain's plan, saying that the tax credits would do nothing to help those with pre-existing conditions who are refused coverage and that the $2500 credit is far short of what is needed to purchase insurance in the individual market. Elizabeth Edwards says this is not the type of change we should support.

Obama does not advocate tax credits or other tax related reforms and his plan does not rely on market forces alone to bring about cost containment. His proposal leaves much of the current employer-based system intact but proposes adding a public plan for people who do not have employment-based insurance, along with premium subsidies related to income. He also proposes mandatory health insurance for children, and there are hints he may be open to mandatory insurance for adults as well. McCain proposes to free the health insurance industry from restrictions so that policies can be sold across state lines; Obama proposes to crack down on the insurance industry and require them to provide "guaranteed issue", meaning that they cannot refuse coverage because of pre-existing conditions.

Despite the clear differences in their basic approach and policies, there are a few similarities: both candidates emphasize prevention, health education, increased use of health information technology (HIT), measuring performance of doctors and linking payment to that performance. These are the "apple pie" issues in health care reform that few oppose on either side of the aisle. It is pretty clear that McCain's approach is not purely a market one, and Obama's is not a government takeover of health care.

All of this may leave you with your eyes glazed over if you are not a total policy wonk. Who really represents change and how much change do Americans really want in their health care? During the Reagan Administration, Republicans tried to eliminate the tax favorability of employer-sponsored coverage and were roundly defeated. The failed Clinton health reform effort demonstrated pretty clearly that while Americans are disgusted with the health insurance industry, they do not want one-seventh of the economy to be restructured to accommodate that disgust. How much change can we believe in or tolerate? Do you want the radical change of McCain that dumps most of the responsibility for health care on you, the patient? Or do you want a more moderate and practical approach to change that the Obama plan represents? There will be plenty of challenges within each of the political parties to these approaches -- many Republicans will oppose eliminating the tax treatment of health benefits, and many Democrats will charge that Obama does not go far enough in his health reform proposal.

Despite internal disagreements in each camp, however, there are very real differences between the two candidates on this issue. These two roads are diverging and the one you choose will make all the difference.

Comments

[BHJensen]

Doc, from one wonk to another......the details here do boggle the mind and I am tempted to rely on the advice of Rodney Dangerfield's physician..."Hey doc, it hurts when I do this....Then don't do that" (but I digress..)

Neither plan, really, address the drivers of cost. McCain says "Invest in prevention and care of chronic illnesses"...now there is a definitive statement. We have far too many overweight, smoking/chewing, red meat-eating, NFL-watching beer drinkers and we are letting an entire generation grow up on Happy Meals.

If you don't believe that matters, the same researchers in your essay identified 50% of the causes of death in America to be lifestyle-related, i.e. preventable. So when that is understood, and a 23 year old recently graduated student cannot get "health insurance" because of ulcerative colitis since age 8, I lose respect for the "policy issues." (pardon the point of personal privilege). We can dabble, and experiment and "consumer drive" our way around for years, but in the end a comprehensive, universal plan that addresses chronic, and often inherited, conditions AND truly rewards behavior is the only real solution. In my youthful wonk days I too would argue the need for careful thought because of the cost; now, I just don't care...cancel a few bombers or whatever...the money is there if the will is as well. I realize candidates campaign in poetry and presidents govern in prose...it's time for both.

[Linda Bergthold - Huffpost Blogger]

You are absolutely right, Jensen. And Obama emphasizes prevention and personal responsibility for health in his plan -- http://www.barackobama.com/issues/pdf/HealthCareFullPlan.pdf - the difference between him and McCain is that McCain kind of tosses the whole issue back to the individual, missing the point that the Presidential "bully pulpit" can show a lot of leadership. Note -- Obama is a pretty trim guy and eats pretty well, even though the press has been creaming him (pardon the pun) for not eating more fast food, pastries, etc. to show his "every man"-ness!! I say -- let them eat arugula not cake!!

[BHJensen]

"There you go again"......."arugula"?......You & Obama needs to remember in the midwest we call that lettuce.......:-)

[edla]

Thank you for making these distinctions clear, Linda. McCain's plan is truly more radical than Obama's. The general public needs to understand that if McCain's plan were implemented, their coverage options would be even fewer than they have today. Elizabeth Edwards' critique and your analysis of McCain's proposal is spot on.

[RoloTomassi]

This article is much-ado about "reform-lite" for Obama, and McCain's plan is simply the culmination of GOP tactics to throw everyone to the dogs where insurance is concerned.

Conyers' HR 676 is the answer, and anything less is a waste of time. We need absolute coverage for everyone; we need a single-payer plan that HAS NO CHOICE about who will or will not be covered, or who will or will not be able to afford costly cancer drugs.

That anyone is still pushing either plan as any sort of significant fix for our healthcare system is a travesty borne of corporatism.