My short answer: neither McCain nor Obama is proposing universal, single-payer, not-for-profit health coverage, so neither one is right.
But at the moment, wishing for Kucinich-Care is about as fruitful as Lady Rothschild whining that Clinton didn't win the primaries or the conservative faithful wishing McCain had picked Condoleezza Rice (or anyone who could enunciate a coherent policy position). So I thought I'd read up and find out what sort of health care plans McCain and Obama wold bring us.
First, the readings. Here are some resources I've found that you may find useful (readers, feel free to add to the bibliography):
- Lori Robertson, "McCain's $5,000 Promise," Newsweek, 2008.04.30.
- Roberton Williams and Howard Gleckman, "Updated Analysis of the 2008 Presidential Candidates' Tax Plans: Executive Summary" (PDF alert!), Tax Policy Center, 2008.09.15.
- Jared Bernstein, "Guts, Brains, and Health Care Reform," Huffington Post, 2008.09.28.
- Josh Bivens and Elise Gould, "McCain Plan Accelerates Loss in Employer-Sponsored Health Insurance: A State-by-State Analysis" (PDF alert!), EPI Policy Center research Bulletin #100, 2008.09.26.
- Kevin Sack and Michael Cooper, "McCain Health Plan Could Mean Higher Tax," New York Times, 2008.05.01.
McCain: $5000 refundable tax credit for each family ($2500 for single folks) to help pay for health insurance. "Refundable" means that if you only owe $3000 in income tax, you not only don't pay it, but McCain still hands you the remaining $2000 to put toward health coverage. To pay for those handouts, McCain includes health benefits you receive from your employer to your taxable income. If your current salary calculates out to $40K of taxable income and your employer provides a health policy worth $12K, then under McCain you'll pay taxes on $52K.
Obama: Employers either provide health coverage or pay into a public plan that individuals can buy into. The public plan, open to all individuals, pools all participants for bargaining power and protects policyholders from being dropped. Obama pays for it "through the war dividend, allowing the high-end Bush tax cuts to sunset, and ... Medicare savings" [Bernstein].
Again, that's nutshell. If you want an exhaustive description, start with the bibliography above and keep reading.
Want results? The best summary comparison of the plans I've seen is the following graph from the Tax Policy Center (click for larger image):
What matters: right out of the gate, Obama's plan gets more people on health insurance and keeps them there. Obama doesn't insure everyone, but he reduces the number of uninsured by half (34 million with coverage by 2018 who wouldn't have it otherwise). McCain's plan makes an initial dent in the number of uninsured (1 million new folks with coverage in 2009, 5 million by 2013) but loses ground over the coming decade, until by 2018, we'd have as many uninsured Americans under McCain as we will if we stick with the status quo.
Given that the lack of health insurance has been linked to poorer health outcomes (including, my pro-life friends, at least 18,000 unnecessary deaths nationwide), getting more people covered is a reasonable priority. On that count, Obama's plan beats McCain's.
From the immediate pocketbook perspective, McCain's plan doesn't look too bad. That $5000 tax credit will more than offset the increased tax you'll pay on your health benefits unless your employer gives you a really high-end health policy. The subsidy would definitely help Erin and me pay for our non-group policy (and maybe even buy better coverage than our current $7500-deductible plan). But there are two problems:
- McCain's plan won't keep up with costs. He indexes the tax credit to inflation, but health premiums "have consistently risen more than three times faster than overall prices" [Bernstein]. The taxes on increasingly expensive employer benefits will overwhelm the McCain tax credit for more and more taxpayers, and more folks trying to buy their own coverage will find the subsidy isn't enough—that's part of why the uninsured go back up under McCain's plan.
- McCain's plan drives people off employer coverage and into the dog-eat-dog "non-group" market. In South Dakota alone, 23,000 to 57,000 workers would find their employers dropping coverage and leaving them to buy their own health insurance on the non-group market [Bivens and Gould]. "Non-group"—that's the individual plans you buy directly from an insurance agent. McCain thinks the free market will work better if more of us buy directly. Problem is, market forces also mean group plans have more leverage, while non-group policyholders are on their own:
[T]his individual market is characterized by poor information about policies, discriminatory pricing, coverage exclusions, refusal to cover pre-existing conditions, and denials of policy renewal.... Even worse, other planks of the McCain plan actually call for removing many of the (already insufficient) consumer protections that currently exist [Bivens and Gould, p. 5].
There's one more reason McCain's plan doesn't make a long-term dent in the number of the uninsured.