Policy & Practice

In this article we discuss the plan that Senator Barack Obama has proposed to address the challenges currently facing Americans because of gaps in the healthcare system. Americans lacking health insurance do not have access to the healthcare they need, and at this time, more than 45 million U.S. residents are uninsured - most of whom are members of working families (U.S. Census Bureau, 2008; Kaiser Family Foundation, 2006). Furthermore, health care costs have been rising dramatically, with health insurance premiums doubling since 2000 (The Henry J. Kaiser Family Foundation, 2006). Because of the fragmented system, healthcare quality is suffering; the U.S. is last among the nineteen richest nations in the avoidance of preventable deaths before age 75, while spending vastly more per person (Nolte and McKee, 2008).

Senator Obama's plan aims to take on these challenges by improving Americans' access to health insurance coverage and needed healthcare, reducing healthcare costs, updating and improving the healthcare delivery infrastructure, and emphasizing important population health priorities. It will blend market-based reform, increasing competition among health insurance companies and pharmaceutical firms, with targeted federal investment in new public initiatives, primarily comprising a new plan administered by the government and available to all. The reason behind a mixed public-private approach is so that all citizens can afford insurance coverage while avoiding disruption of healthcare programs with which individuals are satisfied. We discuss key features of the proposal in the following sections: access and costs, population health and preventative medicine, workforce issues, and juxtaposition to the McCain plan.

The Obama plan addresses the two most important challenges facing healthcare in the United States today: expanding access to quality care and reducing costs. The plan recognizes that these two issues are inextricably linked. High costs in providing healthcare are largely passed along to Americans in the form of higher insurance premiums (onto which insurers also add their own administrative fees called “loading fees”). The existing high premiums, an average family policy costs more than $12,000, make health insurance unaffordable thereby limiting access to care and leading to an uninsured subpopulation (Kaiser Family Foundation, 2007). Yet broadening coverage is tricky because as a result more healthcare services will be consumed, driving up total costs and not reducing premiums. So, expanding coverage must be coordinated with increasing efficiency in the health system to reduce premiums. The Obama plan aims to improve efficiency in a number of areas ranging from stimulating more efficiency-improving competition to investing in technologies such as electronic medical records (EMR) that will reduce administrative burden on providers.

In this section, we will summarize the current situation regarding access to health insurance and then discuss Senator Obama's proposal designed to greatly reduce the numbers of Americans who are un- or under-insured. Nearly forty-six million Americans lack health insurance (U.S. Census Bureau, 2008). Eighty percent of the uninsured are in working families, caught between family incomes too high to qualify for existing government-provided health insurance and employers who cannot or do not offer health coverage (Kaiser Family Foundation, 2006). The ramifications of a lack of access to care are staggering - more than 22,000 working age Americans die annually because of lack of insurance (Families USA, 2008). Additionally, those who lack insurance utilize services through inefficient points of care, such as emergency rooms (ER), thereby driving up costs for everyone and increasing ER waits - even for the insured (CNN, 2008). Senator Obama's healthcare reform plan asserts that ensuring that these citizens gain access to quality care is a top priority and accordingly outlines three over-arching initiatives: creating a new government (often called “public”) insurance program, broadening the safety net, and instituting the National Health Insurance Exchange (NHIE).

One essential aspect of improving access to quality care is improving insurance coverage. Toward the goal of ensuring that each American can afford insurance, Senator Obama would create a new public insurance program. The public plan would be open to the self-employed, other individuals without access to group coverage, and small businesses that want to offer insurance to their employees. It would be based on the successful Federal Employees Health Benefits Program (FEHBP), the insurance available to Members of Congress, with benefits comparable to traditional coverage. Guaranteed eligibility would ensure that Americans with illnesses or pre-existing conditions cannot be turned away, enabling those who need health care the most, and often find it difficult to afford it, to receive it. Coverage would include all essential medical services, including preventive, maternity, and mental health care. The plan also proposes initiatives like disease management, programs that target identification and evidence-based management of chronic conditions that prevent large acute treatment expenditures, and quality reporting mechanisms, requiring insurers and providers to submit performance data, which simultaneously limit costs and reduce health disparities (Center on Aging Society, 2004). By introducing initiatives for increased coverage simultaneously with those to reduce costs and improve efficiency (federal reinsurance, infrastructure investments, and increased transparency requirements), these benefits would be offered at affordable premiums, co-pays, and deductibles.

A second important initiative, income-subsidies and expanding the safety net, is aimed at helping those Americans who need it the most, children and those who do not qualify for support programs. Indeed, eleven percent of children in the United States are uninsured (U.S. Census Bureau, 2008). First, Senator Obama's plan would expand eligibility for Medicaid and State Children's Health Insurance Plan (SCHIP), which the states have successfully used to provide invaluable services to those below the poverty threshold and children respectively. For those Americans who do not qualify for the expanded public support programs but still need assistance, Senator Obama's plan would provide income-related federal subsidies to make sure they can afford coverage. Moreover, these individuals would be given the flexibility to use the subsidy toward the new government plan or apply it toward a private plan. A final piece would enable children to remain covered under their parents insurance until their 25th birthday and issue a mandate that all children have health insurance coverage. An independent analysis stated that nine million uninsured children would gain access to health benefits under the Obama plan (Kaiser Family Foundation, 2007).

An oft-mentioned criticism of instituting a public plan (or expanding current ones) is that government provision of insurance would be inefficient. However, Medicare, which is government run and managed, is an extremely successful and popular insurance program, providing coverage to over 44 million American (Kaiser Family Foundation, 2008). Furthermore, the Obama plan calls for greater accountability and oversight, increasing the likelihood that the plan will mimic or outperform Medicare's efficiency. Additionally no person would be forced to participate in the public plan - it is simply an additional option open to all Americans.

The new program is designed to have several features that would facilitate utilization by both healthcare providers and for patients wishing to gain coverage for healthcare. The plan aims to reduce administrative costs by simplifying paperwork for providers. Additionally, the plan states that the enrollment process would be setup in a manner that is simple and expeditious for patients. Further details about these process improvements are yet to be outlined given the policy proposal stage of the plan. Participants in the new public program would retain portability of coverage so they need not worry about coverage when switching jobs. Participating hospitals and providers would also be required to collect and report data regarding quality of care provided to patients across the spectrum. These data could then be analyzed to ensure that quality and efficiency objectives are being met, thereby enhancing the effectiveness of the healthcare system for all. Research that compares the benefit of various treatment options by patient characteristics, comparative effectiveness research, could greatly improve the impact of our healthcare dollar. Overall, by simplifying the coverage process and improving efficiency the plan hopes to produce increased savings for the system overall.

A final important initiative, the National Health Insurance Exchange (NHIE), aims at giving people more choices in health insurance coverage by reforming the private insurance market. Senator Obama's plan would create the NHIE as a watchdog program and market facilitator that would institute rules and standards to ensure transparency and fairness to the public. In this manner, participants would be able to choose between the new government-bassed insurance program and the myriad private options that meet minimum standards guaranteeing benefit generosity, high quality, controlled costs and limited premium increases, and efficiency. The income-based sliding subsidies would be applicable regardless of plan choice, again augmenting the ability of Americans to choose what is most suited to them.

With Senator Obama's plan, employers would be called upon to contribute toward improving health coverage to supplement the government's efforts. Those employers that do not offer meaningful coverage or make meaningful contributions to the cost of quality health coverage for their employees would be required to contribute a percentage of their payroll toward the national plan. Such an initiative would improve access to healthcare through two mechanisms. First, employers would have the incentive to provide coverage, reducing the squeeze on the “working poor.” Second, the contribution of employers who do not offer benefits would support the income subsidy to those purchasing individual coverage.

Senator Obama's current plan does not include a mandate, often called “pay or play,” for adults to purchase health insurance. Some have been critical of this, stating that by not mandating insurance, the plan will not cover all Americans. Senator Obama's plan states, however, that the primary reason individuals lack insurance is affordability; and it does not want individuals to be forced to buy plans that they cannot afford. The affordability issue has forced Massachussetts to exempt 20% of its uninsured from their health insurance mandate because health insurance is simply too expensive currently (Dembner, 2007). Senator Obama's plan will first address affordability and then will assess the need for a mandate; being cautious about government intervention that could result in perverse incentives (e.g., a situation where it is cheaper to pay a fine than purchase insurance thereby hampering citizens without any improvement in health insurance coverage rates).

Rapidly rising healthcare costs have placed more of the financial risk associated with illness on Americans. From 2003 to 2007, the share of nonelderly adults spending more than 10% of their income on medical costs (5% if they were low income) rose from 15 to 25 million (Schoen et al., 2008). Moreover, half of all bankruptcies are due in part to medical costs and crises and 79 million people struggle to pay medical bills or are paying off medical debts (Himmelstein et al., 2005; Collins et al., 2008). Yet in our current system, Medicare is barred from negotiating with drug companies to cut prices and lack of transparency in the health insurance industry makes it nearly impossible to know what claims insurers accept and deny, what the true costs and benefits of their plans are, etc. (Hogberg, 2007; Congressional Budget Office, 2008). Clearly, we need a new approach to healthcare that will stem the bounding costs and restore the concept of insurance as a way to mitigate financial risk. Senator Obama's plan seemingly recognizes the extent of the problem. It seeks not only to decrease the price of health insurance for individuals and employers, but also to control spiraling costs in the system as a whole. The Obama plan would employ several initiatives including federal reinsurance, investing in the information technology infrastructure used by physicians, hospitals, and insurers, and creating the NHIE to promote competition.

First, to keep premiums down the Obama plan would employ a new federal reinsurance program, reimbursing insurers for the costs of providing care to the sickest individuals in the national risk pool. In today's market, 5% of the patients with the highest health expenditures account for almost 50% of healthcare costs (Stanton and Rutherford, 2006). One such unfortunate worker threatens a small employer's solvency. Under the Obama plan the federal government would finance the costs for the most expensive patients, potentially saving insurance companies millions of dollars that they would pass on to consumers through reduced premiums. This program would then make it attractive for insurers to offer coverage more broadly and more small businesses would be able afford to offer employer-provided health insurance. This estimated savings of this reinsurance program for the average family could be up to $2,500 in insurance premiums every year. A criticism of this initiative is that it simply shifts costs from employers to the federal government (Laszewski, 2008). While this assertion is strictly true, federal reinsurance would likely increase access to health insurance by making it less costly for employers to provide it (and therefore reducing premiums). Importantly, the federal program would pool risk across large groups, something small businesses cannot do themselves. By encouraging more employer-provided insurance, less Americans will be pushed into the inefficient individual market, where administrative costs are $259 higher on average, therefore producing true cost savings after implementation (Harbage, 2008).

The Obama plan would also allow Medicare to bargain for lower drug prices rather than paying prices that pharmaceutical companies set. Because Medicare is such a large purchaser of drugs, it wields strong bargaining power to lower drug prices, potentially netting savings up to $30 billion (Hickey and Cruz, 2007). Another area of waste that is an opportunity for savings are the excess subsidies paid to Medicare private plans to push forth privatization. By paying private plans the same as traditional Medicare, as outlined in the Obama plan, the Congressional Budget Office (CBO) estimates that Medicare would save $50 billion over the next five years (National Committee to Preserve Social Security and Medicare, 2008). These potential combined savings of $80 billion would then be passed down as lower premiums to the elderly or to finance other initiatives in the plan.

A second major initiative in the Obama plan would focus on infrastructure enhancement that can reduce costs while improving health outcomes. A proposed $50 billion investment in health information technology (IT), such as electronic medical records and electronic order entry, would modernize the medical system. Because time consuming paperwork will be reduced and information will be more readily available, health IT is projected to save money through efficiency gains while also improving the quality of care. Health IT improvement would also reduce avoidable medical errors (e.g. electronic prescriptions remove problems with illegible handwriting and automatically check that dosage mistakes do not get filled). Another area of investment will focus on disease management programs, comprehensive initiatives aimed at targeting a specific chronic disease using a variety of tools, such as evidence-based practice guidelines, collaborative practice models with multidisciplinary care teams, patient self-management education, process and outcomes measurement, and routine reporting and feedback between stakeholders (Center on Aging Society, 2004). Disease management programs have tremendous potential to improve health outcomes for patients suffering from chronic disease. Careful management of chronic conditions would improve efficiency since small investments in these programs would reduce expenditures on avoidable acute events substantially. Similarly, another initiative is to institute stricter hospital reporting requirements which would facilitate the acquisition of important information used to evaluate quality and cost at individual hospitals. Disseminating the cost and quality assessments will improve the quality of information patients have in choosing providers, which will give providers greater incentives to provide high quality care at low prices. A criticism of these initiatives is those partially underway have yet to yield results. Some of the proposed improvements in the Obama plan, such as health IT will take longer periods of time (years as opposed to months) to be implemented and yield cost and quality benefits; however, others have proven effective already. For example, disease management programs saved Medicare 20 percent of chronic condition costs in its trial (Center on an Aging Society, 2004).

Finally, the Obama plan aims to address problems with transparency in the insurance industry, improving how the market functions resulting in greater efficiency through increased competition. The National Health Insurance Exchange would be the entity responsible for doing so. It would require full disclosure of plan costs and benefits - like premiums, copayments and deductibles, and special benefits - so that consumers can make informed choices. The plan would also introduce greater competition in the pharmaceutical industry to reduce prescription drug costs. Allowing drug re-importation, importing drugs in from other countries such as Canada where prices on branded drugs are often lower, would also increase competition. A final piece would be to curb the abuse of market power by drug companies to block generic drugs, another pro-competition policy.

While the American health insurance system is in desperate need of reform, it does function well for some people. Threatening the well functioning parts of the system in order to improve other aspects could result in more unhappy people. Furthermore, the goal of the Obama plan is to provide more choices and more information, and along the way competition will drive efficiency improvements. As such, it is important to identify what the Obama plan will not change in our current system. Most importantly, programs like the new public program and the National Health Insurance Exchange will be available to those who need them, but those who are satisfied with their current private insurance will be allowed to continue their coverage without change. No one, not even those participating in the public programs, will need to change doctors or medications, since the plan does not involve the government in the provision of medical care. Finally, the Obama plan would support the initiatives at the state level such as those of Massachusetts and Vermont, by allowing states to institute their programs as long as they meet the minimum standards of the federal plan. States would be encouraged to innovate. For example, Massachusetts passed a plan for universal coverage that includes subsidies so that citizens can afford to buy insurance and phases in a mandate that individuals have coverage (Commonwealth Connector, 2008). Vermont offers a state sponsored plan for the uninsured with subsidies, requires employer contributions, and has a plan for preventing and managing chronic conditions (Green Mountain Care, 2007).

Improving the health of Americans through preventive medicine and population health initiatives is important because they are wide-reaching, fundamental ways our system can improve its performance. Americans currently have a lower life expectancy and higher infant mortality rates than our counterparts in other developed nations, although we are spending almost two times as much per capita on healthcare (Reinhardt, Hussey, and Anderson, 2004; OECD, 2005). Access to high-value preventive services, such as routine cancer screening and immunizations against influenza or pneumonia, along with other population health measures are likely to provide gains along both indicators. In addition to differences in comparison to other countries, American ethnic and sexual minorities, women, and rural populations health needs are not met as fully as other groups. As such, addressing health disparities is an important issue yet outstanding. Senator Obama's plan aims to address the gaps in health status of all Americans, through an emphasis on population health, while also focusing special attention on the health disparities facing our country's vulnerable groups. This section reviews the components of Senator Obama's plan focused on preventive medicine, chronic disease management, population health priorities, health disparities and global health.

A focus on promoting prevention and strengthening population health efforts is essential for containing rising healthcare costs and for improving the overall health status of Americans. Currently, one in three Americans has a chronic condition, and the sequelae of five chronic diseases - heart disease, cancer, stroke, chronic obstructive pulmonary disease, and diabetes - cause over two-thirds of all deaths each year (Anderson et al., 2002; Centers for Disease Control [CDC], 2008). Care for patients suffering from diabetes alone costs over $130 billion per year (CDC, 2008). The Obama plan recognizes that tackling the twin problems of cost and health status requires a focus on both better disease management and improved prevention efforts.

Disease management programs are comprehensive initiatives aimed at targeting a specific chronic disease using a variety of tools, such as evidence-based practice guidelines, collaborative practice models with multidisciplinary care teams, patient self-management education, process and outcomes measurement, and routine reporting and feedback between stakeholders (Center on an Aging Society, 2004). These programs have been proven to improve outcomes for patients with chronic diseases, while simultaneously reducing costs through lower hospital admission rates and emergency room visits. For example, one study of Medicare beneficiaries with diabetes found that those enrolled in a disease management program saw a primary care provider more often, regularly accessed preventive screenings for eye, lipid and kidney health, and achieved lower blood glucose levels (Center on an Aging Society, 2004). Moreover, the average monthly cost per patient was reduced by 20 percent (Center on an Aging Society, 2004). Given the documented success of disease management, the Obama plan would expand the use of proven disease management programs.

Additionally, the plan recognizes that it is important to emphasize prevention before the onset of disease. Only 8% of elementary schools require that students participate in physical education, even though childhood obesity is reaching epidemic proportions (CDC, 2008; CDC, 2008). Senator Obama's plan would work to create healthier school environments for children by assisting with contract policy development for local vendors, increasing grants for school-based health screening programs and clinical services, and increasing financial support for physical education in schools. It would also emphasize workplace health promotion programs and on-site clinical prevention services such as flu vaccines, nutritious food options in cafeterias, and employee exercise facilities. Employers would also be encouraged to choose insurance plans that cover preventive services - such as cancer screening and smoking cessation programs - and these services will be covered in all federally supported health plans, including Medicare, Medicaid, SCHIP, and the new public plan.

While increasing the focus on preventive medicine, the Obama plan would continue to highlight historically important population health initiatives, such as reducing lead poisoning and mercury pollution. More than 430,000 American children have dangerously high levels of lead in their blood, exposing them to the risk of developmental delay, hearing loss, peripheral nerve damage, anemia, and gastrointestinal complications (Environmental Protection Agency [EPA], 2003). The plan would require that child care facilities be lead safe within five years. To benefit the five million women of childbearing age with high levels of mercury in their blood, and the 630,000 newborns born at risk each year, Senator Obama's plan would work to significantly reduce the amount of mercury deposited in oceans, lakes and river, thereby decreasing exposure to mercury and chances of mercury toxicity (EPA, 2003). Responding to existing and emerging health threats is stated to be a priority of the future Obama administration.

Mental health is another important issue that is gravely under-addressed. One in five American families is currently affected by mental illness, and the cost of untreated mental illness is more than $100 billion per year (National Alliance on Mental Illness [NAMI], 2006). Senator Obama's plan would support mental health parity so that treatment for serious mental health illnesses is covered under the same terms and conditions as coverage for other serious diseases.

Disparities in access to care and standards of care disproportionately affect minority Americans, Americans of lower socioeconomic status, and rural populations. In a review of over 100 studies assessing the quality of healthcare services for racial and ethnic minority groups, the Institute of Medicine consistently found that minorities are less likely than whites to receive needed clinical care (Institute of Medicine [IOM], 2002). These inequalities manifest themselves in poorer health outcomes for minorities - for example, the infant mortality rate for African Americans is more than twice the rate for whites (National Center for Health Statistics, 2007). These same disparities plague women and rural populations (Agency for Healthcare Research and Quality, 2004; Wilhide, 2002). Senator Obama's plan is committed to tackling health disparities by addressing differences in access to health coverage and by promoting prevention and population health.

As noted above, Senator Obama's plan would expand coverage for these vulnerable populations through Medicaid, SCHIP, and a new government health insurance program. Additionally, the plan would require hospitals and health plans to collect, analyze, and report on health care quality for minority and other underserved populations, employing these data to work with stakeholders to address the disparities identified. These data would be used to increase targeted interventions - such as mobile health clinics and community outreach - to improve access to care for underserved communities. These efforts would work to address gaps in health indicators such as rates of obesity, infant mortality, and low birth weight. The Obama plan would encourage stakeholders, such as hospitals, public health departments, and insurance companies, to work together to address these gaps in care. The plan will also work to diversify the health provider workforce to ensure provision of culturally competent care; to implement and fund evidence-based interventions like patient navigator programs (initiatives that link patients with trained advocates who can help them navigate the complicated healthcare system in order to better access existing resources and support services); and to support and expand the capacity of safety-net institutions that provide a disproportionate amount of care for underserved and vulnerable populations.

Lastly, Senator Obama's plan would continue the strong efforts of the US in the arena of global health, while simultaneously expanding our investment in promoting healthy communities around the world. Currently, nearly 40 million people are infected with HIV worldwide; more than two-third of infected adults and greater than 90% of infected children live in sub-Saharan Africa (UNAIDS, 2007). Senator Obama's plan would continue bipartisan efforts to combat the HIV/AIDS epidemic and promote greater investment in the fight against AIDS. Recognizing the interconnections between poverty and health, the Obama's plan also embraces the Millennium Development Goals (MDG's), seeking to cut extreme poverty in half by 2015 to help the world's weakest states to build healthy and educated communities, through support of the World Food Program and local UN efforts to improve small business opportunities, access to small loans through microfinance programs, and access to wider markets. The MDG's were crafted in 2000 by the United Nations, and ratified by 189 UN member states, with a goal of promoting development world-wide by addressing social and economic conditions that impede developmental progress. These eight goals focus on universal primary education, child mortality, maternal health, HIV/AIDS, environmental sustainability, gender equality, and extreme poverty. The MDG's have been given a deadline of 2015. Senator Obama's plan recognizes the global importance of these goals, and states a commitment to supporting US efforts to help reach these ambitious goals by 2015.

While specialization in medicine has led to remarkable advances, there has been an underinvestment in preventive services and primary care. Too many Americans lack access to basic services to manage chronic illnesses, such as diabetes and asthma, which affect one in three Americans (Lambrew, 2007; Anderson et al., 2002). In order to help these individuals manage their diseases, a stronger primary care, nursing, and population health workforce is needed. Unfortunately the number of primary care physicians and population health workers is dwindling and we continue to face a dramatic nursing shortage (The Robert Graham Center, 2003). This section reviews Senator Obama's plans to improve health professional support and training for both primary care physicians and nurses. To address these crucial problems, the Obama plan would increase support for loan repayment, grants for developing new training curricula, and a change in the insurance reimbursement and funding mechanisms to support providers.

According to the Institute of Medicine and the American Academy of Physicians, the primary care physician workforce (including family physicians, general internists, and general pediatricians) is on the verge of collapse (Bodenheimer, 2006). Unfortunately, the number of medical students choosing primary care specialties has continued to decrease every year since 1997, and in 2007, only 7.8% of medical students participating in the National Match selected family practice, a primary care specialty, down from 8.1% in 2006 (Kaiser Family Foundation, 2007; Cross, 2007). A significant contributor to the problem is the physician reimbursement system: thirty minutes spent performing a diagnostic, surgical, or imaging procedure often pays three times as much as a 30 minute visit with a primary care physician to discuss the management of a chronic illness (Stanton & Rutherford, 2006).

The Obama plan would provide incentives and support for those entering primary care. As an important first step, the plan will expand funding - including loan repayment, adequate reimbursement, grants for training curricula, and infrastructure support to improve working conditions - to support primary care practitioners. Senator Obama has also called for an expansion of the successful National Health Service Corps - a program of the Department of Health and Human Services that recruits health care professionals to work in national designated “health professional shortage areas” (HSPAs) such as isolated rural communities and overwhelmed urban areas - and the creation of a new “Health Corps” within AmeriCorps - an existing national network of service programs focused on education, public safety, health and the environment - to encourage young people to practice in medically underserved areas.

Nurses are the backbone of America's healthcare infrastructure, offering desperately-needed expertise and providing essential care to patients. Yet, as the baby boomers age, some estimate that the country will have a shortage of more than half a million nurses by 2025 (American Association of College of Nursing, 2008). Lower nursing levels have a direct impact on quality of patient care, and are associated with increased hospital mortality and longer inpatient hospital stays (Minnesota Evidence Based Practice Center, 2007). In order to ensure that the care received by Americans continues to improve over the next decades, we must continue training and supporting an adequate number of nurses. Senator Obama's plan seems to recognize the importance of nursing care, and the National Health Service Corps and the new Health Corps program will help support American nurses in their service to the healthcare infrastructure.

In this section, we analyze Senator McCain's approach to health insurance market reform, financing, Medicaid and Medicare Reform, and draw contrasts with Senator Obama's proposal. Senator McCain's plan proposes to lower costs and improve quality, though it offers little detail on how these important goals will be accomplished. Indeed, many of the details it does provide - such as a revamped health IT infrastructure, increased pharmaceutical competition, and a greater focus on prevention - are also featured in Senator Obama's plan. In contrast to the Obama plan, the central tenet of Senator McCain's health plan is the elimination of federal subsidies for employer-sponsored health insurance, on which 160 million Americans currently rely to get their health-insurance coverage. Instead, Senator McCain's plan gives families tax subsidies to encourage them to buy insurance in the inefficient individual market without much help from the government (Harbage, 2008). Instead of addressing the plight of the 45 million Americans who are uninsured, Senator McCain's plan could expand the ranks of the uninsured while weakening the regulations that protect patients from exploitation by their insurance companies (US Census Bureau, 2008). An estimated 20 million Americans would lose their health insurance because of the collapse of employer provided health insurance (EPHI) (Buchmueller et al, 2008). Largely ignoring the growing uninsured population, Senator McCain's plan prioritizes increasing individual responsibility by expanding the share of costs borne by those who already have coverage over increasing access for those who have no coverage or are underinsured. The plan squarely places more of the financial risk and burden of healthcare on the individual, without assuring that individuals and families have the necessary and sufficient resources.

The McCain Plan would eliminate the federal tax incentive for employer-sponsored health insurance, replacing it with a $2,500 tax credit ($5,000 for families) that would be paid directly to insurance companies. States would be required to supplement the $2,500/5,000 tax credit for families with low incomes and high medical costs through a “financial risk adjustment bonus.” Yet the McCain plan does not offer states any resources to offset these costs. Pushing people from a proven system of EPHI into the individual market seems risky at best. Indeed, the McCain plan can only be successful if risk pooling can occur on the individual level, which individual markets have consistently failed to do in the US to date (Tanner, 2008). Moreover, the McCain plan will raise administrative costs $4 to $21 billion because of the rampant inefficiency in the individual market; that is twice the administrative costs of the group market (i.e. EPHI) (Harbage, 2008; Buchmueller et al., 2008). Furthermore, according to a recent Kaiser Family Foundation poll, as many as four out of five Americans feel that buying individual health insurance would be more difficult than getting it from their employer

Senator McCain's call to unlink insurance coverage from employment has one advantage over the current system: portability. However, his plan will likely reduce or eliminate health care coverage for millions of Americans whose employers would cut back or cancel their own contribution to employees' healthcare coverage. Many Americans are happy with their current health plan, and employer-provided coverage consistently offers more comprehensive insurance than individual, with lower out-of-pocket expenditures and more broad-based coverage (Bernard and Banthin, 2008; Buchmueller et al., 2008). Employers are able to negotiate with insurers on behalf of their group of employees more effectively than individuals, particularly because a group naturally pools risk. In the individual market, insurers spend substantial resources in evaluating individuals' risk and selecting those who are favorable (Harbage, 2008; Buchmueller et al., 2008). Consequently, eliminating the employer-provided health insurance system would make millions of Americans worse off. The Obama plan, by contrast, achieves portability without disrupting the employer-based system for people who currently have insurance coverage.

The inadequacy of Senator McCain's tax credits also threatens to severely compromise access to coverage, particularly for Americans who are just too young to qualify for Medicare. In 2006, average premiums for purchasers ages 60-64 were $5,090 for individuals and $9,201 for families, so the McCain tax credit ($2,500 for individuals, $5,000 for families) would fall starkly short resulting in a depletion of resources just as older Americans are preparing for retirement (AHIPCPR, 2007). Indeed, the McCain plan would be disastrous for millions of older, lower-income, and sicker Americans, threatening to take away their current coverage while effectively pricing them out of the individual insurance market. Millions of Americans could be forced into the ranks of the uninsured at a time in their lives when healthcare coverage is perhaps most critical.

The McCain plan's approach to dealing with Americans who fail to find coverage through the smaller number of employers who will be offering health insurance or cannot afford the more expensive yet more limited policies on the individual market is to put them into the Guaranteed Access Plan, basically high-risk pools at the state level. However, high-risk pools have been demonstrated to fail dismally. In the 34 states that offer high-risk pools only 200,000 Americans receive coverage through them. Scarcity of funding leads to minimal benefits and restricted enrollment. Incredibly, the Florida high-risk pool has been closed to new enrollment since 1991 (Buchmueller et al., 2008). Despite this evidence, the McCain plan has proposed funding that falls well short of what would be needed; the $7 to $10 billion in the plan would only cover three million of the uninsured, while limiting access to EPHI would increase the ranks of uninsured beyond the 45 million today (Buchmueller et al., 2008; US Census Bureau, 2008).

Additionally, Senator McCain's plan weakens state regulation of health insurers, ostensibly to increase competition in a nationwide insurance market (McCain, 2008). But past reform efforts have shown that instead of increasing competition, market deregulation efforts have resulted in increased consolidation in the insurance industry, giving insurers monopoly power that they have used to extract higher profits from employers, providers, and patients (Kaiser Family Foundation and Health Research and Educational Trust, 2006). Moreover, the state regulations which Senator McCain seeks to undermine provide critical protection for consumers against unfair insurance practices, such as denying coverage to those with preexisting conditions and cancelling coverage when people seek expensive care. The McCain plan does nothing to protect people with cancer, diabetes, mental illness and other health conditions from discrimination by insurance companies. Furthermore, insurers can choose to base their coverage options in a state with weaker regulations while providing insurance to citizens of another state, leaving affected purchasers and their elected representatives no recourse to regulate the insurer.

In contrast, Senator Obama's plan explicitly requires that every applicant be issued a policy, reflecting an insurance principle known as “guaranteed issue.” Recognizing the fundamental problems in the private insurance market, Senator Obama's National Health Insurance Exchange would facilitate the purchase of private plans while serving as a watchdog group and reformer focused on protecting patients' rights and promoting industry best practice on quality and safety (Obama, 2008).

For all of their differences, there are some similarities in the McCain and Obama plans, including a commitment to expanded Health Information Technology, increased focus on prevention and chronic disease management, and an emphasis on quality improvement. However, unlike the Obama plan, which quantifies both the impact of its cost-containment strategies and a financing mechanism, the McCain plan contains almost no description of how its plan would be financed. It does not quantify the projected savings from eliminating the tax exemption on employer-subsidized insurance. Moreover, it passes the responsibility for covering the working poor and the sick, for whom its subsidies are inadequate, on to the states.

Senator McCain calls vaguely for “tough choices” on the future of entitlement programs, including Medicare and Medicaid, but his plan is short on details. Like Senator Obama, Senator McCain emphasizes reforming the Medicare program to focus on prevention and care coordination. However, Senator McCain seeks to expand the role of private insurers in the provision of Medicaid coverage despite empirical evidence demonstrating no improvement in access or cost savings for state or federal governments (Hackbarth, 2007). The Obama plan, on the other hand, recognizes the importance of programs like Medicare and Medicaid to millions of Americans, and seeks to ensure they are strengthened and solvent in the coming decades.

Overall, given the challenges facing the health system today including over 45 million uninsured, soaring health insurance premiums, and need for quality improvements, Senator Obama's proposed plan is our best chance at addressing these issues (US Census Bureau, 2008). The plan takes a balanced approach between fundamental reform and incremental changes, instituting new programs such as a new government plan and the NHIE where the gaps are the largest and improving current programs such as expanding SCHIP when there is a base from which to work. Furthermore, the plan attempts to be realistic politically about the type of reform that could be implemented. The general approach is to support market-based competition for maximal efficiency, yet with oversight in areas where it has not functioned well (e.g. NHIE for insurance transparency). In areas such as provision of individual health insurance where the market has failed, the Obama plan seeks to provide public alternatives so Americans have choices and do not suffer, while simultaneously pushing greater competition with the private sector. In addition, the plan will include common sense revisions to our current system which have resisted change likely because of special interests. Substantial savings, for example, will accrue because Medicare will be able to bargain down drug prices and it will not pay excess subsidies for the sake of privatization when traditional Medicare is more cost-effective.

The Obama plan also recognizes that we must make investments in the infrastructure of our health system and the way it is delivered to increase efficiency and foster sustainability. The $50 billion investment in health IT and implementation of disease management programs, improved hospital reporting, comparative effectiveness research, and loan repayment programs will improve the quality of care delivered and reduced disparities in it across populations. Furthermore, by investing in programs that improve efficiency each healthcare dollar spent will result in a greater amount of health. Such investments will allow our health system to continually improve its efficiency so quality of care can rise in an affordable fashion.

In contrast, Senator McCain's plan seems reckless, taking down the employer provided health insurance system that most Americans rely upon and instead making them depend on the inefficient individual insurance market, which has failed to offer coverage for so many Americans already. As a result, 20 million Americans would lose their coverage and administrative costs to the system would jump $4 to $21 billion (Buchmueller et al., 2008; Harbage, 2008). For those Americans who like their plans and manage to keep coverage, the number of choices is likely to dwindle. Moreover, the McCain plan would weaken regulation in the individual market it is sending people to even though that market is failing to insure millions in dramatic fashion. The tax credits provided fall well short of premium costs and the plan would not expand safety net programs like SCHIP that have been proven to work. When people fail to procure insurance in the individual market, they will be forced into Guaranteed Access Plans, the backup plans based on high-risk pools even though high-risk pools have failed in each of 34 states that have tried them (Buchmueller et al., 2008). Costly excess subsidies to Medicare private plans would be left in place. Finally, inexplicably the plan does not mention how it would finance any of its initiatives. On all accounts then, the McCain plan seems like the more risky choice by a drastic margin.