McCain, Obama Offer Contrasting Health Care Platforms

Although the economic crisis has eclipsed every issue as the top concern among U.S. voters, health care reform remains a hot campaign topic as the presidential election draws closer.

Voters are being offered significantly different road maps for health care reform by the candidates. While they agree that the federal government needs to move beyond the gridlock on Capitol Hill and make substantive changes to the health care system, their approaches differ widely and reflect many of the core beliefs of their political parties.

The plan offered by Sen. John McCain, R-Ariz., would shift the responsibility of paying for health care to individuals, while the proposal put forth by Sen. Barack Obama, D-Ill., would leave primary responsibility for providing health coverage with employers but would increase their obligation to pay for care.

McCain's proposal would end the income tax exemption for health care benefits and would substitute a tax credit of $2,500 for individuals and $5,000 for families to offset the cost of health insurance. McCain claims that his plan will give consumers the opportunity to select the coverage that suits them and their families best. Any person, under McCain's plan, who purchases an innovative insurance plan that costs less than the tax credit would be able to deposit the remainder in a health savings account. McCain's proposal would make health coverage portable, so that workers can continue their coverage when they switch jobs.

Tax Change vs. Play or Pay

Obama proposes keeping income tax exemption for health coverage and allowing workers to keep their current coverage. He would attempt to reduce health care costs for businesses by focusing on preventive care and by requiring health care providers to collect and report health care cost and quality data.

A key element of the Obama plan is a play or pay feature that would require employers that do not offer employee health care benefits to contribute a percentage of the organizations payroll toward paying health insurance premiums for employees. Small businesses would receive a health care tax credit to help them provide benefits to employees. Obama claims that his plan would provide health care to anyone who wants it by establishing a national health insurance exchange, which would offer a range of private insurance options as well as public plans based on benefits available to members of Congress.

McCain has said that Obama's plan would not do enough to lower health care costs and would eventually cost U.S. taxpayers trillions of dollars and place a further drain in the struggling economy. Obama has stated that McCain's plan would shift the cost burden on the backs of U.S. workers while drastically reducing their health care coverage.

The most controversial element of McCain's plan is the proposal to eliminate the tax exemption for employer-provided health benefits, which has been considered a sacrosanct provision of the U.S. Tax Code since it was enacted in 1954.

McCain has stated that eliminating the tax exemption would force individuals to become more responsible health care consumers and force insurance vendors to create more cost-effective and efficient health insurance plans. Critics of McCain's plan have said that it would prompt employers to eliminate health benefits and would not provide enough of a tax break to make health care affordable for most middle class workers.

Obama's plan, some business groups argue, would place a new tax burden on employers to pay for health insurance. Some say that his proposal would become a slow motion Medicare plan for everyoneand could end up costing trillions of dollars.

The debate is certain to intensify when the 111th Congress convenes in January 2009. Most political observers agree while Congress might begin debating health care reform in early 2009, quick passage of a comprehensive health reform package isn't likelyat least in part because the economic downturn and $700 billion financial rescue measure have cut into the resources available to reform health care.

Tepid Support for Either Plan

But health care has provided a particularly sharp contrast between the two hopefuls, and business groups have not expressed overwhelming support for either candidate's plan. A recent survey conducted by the American Benefits Council of benefits professionals who design and administer employer health plans expressed concerns with both proposals. According to respondents, McCain's proposal to repeal the tax exclusion for employer-provided health benefits and Obama's play or pay plan would hurt U.S. businesses and their workers.

The feedback from this survey should be a wake-up call to our political leaders that the people responsible for structuring and managing employer-sponsored health plans are deeply skeptical about key elements of both presidential candidates reform proposals, said James A. Klein, president of the American Benefits Council. Rather than taxing workers health benefits and compelling employers to provide coverage they cant afford, candidates should focus on initiatives to control costs and promote top quality care."

The corporate benefits professionals in the survey said that the presidential candidates need to pay more attention to issues that affect the cost of health coverage and the quality of health services.

Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, agrees. In the face of these challenges, we are having the wrong conversation about health care in this country. Or, at best, an incomplete conversation. And we are setting the wrong expectations for the American people. Nowhere is this more evident than on the campaign trail, Donohue said recently in a written statement.

The wrong conversation focuses inordinately on the uninsured while offering only lip service to spiraling costs, medical accidents, frivolous lawsuits and the need to focus on wellness and prevention.

Source: SHRM Online

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