2008 Presidential Candidates Propose Differing Plans for U.S. Healthcare System

Democratic presidential candidate Barack Obama and GOP nominee John McCain both cite failings of the nation’s healthcare system—47 million Americans without healthcare coverage, skyrocketing healthcare costs, and quality gaps, among others. But the two differ significantly in their proposals for addressing these problems. Exactly how politically and economically feasible their healthcare plans are is a matter of debate. That withstanding, here’s an overview of what the candidates have proposed concerning healthcare coverage, cost containment, quality, reporting, Medicare reform, care coordination, and other issues relevant to healthcare for older Americans:

Sen. John McCain (R-Arizona) Sen. McCain’s plan doesn’t call for a general overhaul of the nation’s healthcare system, but, rather, for limited, specific changes. He would not mandate universal healthcare coverage but would “use competition to improve the quality of health insurance with greater variety …lower prices and portability.” His plan would shift emphasis from employer-provided health insurance to privately purchased coverage. It would eliminate employer tax deductions for employee health insurance costs, and offer Americans tax credits ($2,500 a year for individuals; $5,000 for families) that they could use to purchase private coverage “tailored to their needs.”

Sen. McCain would expand the use of health savings accounts and allow those choosing insurance that costs less than their healthcare tax credit to deposit the balance in these accounts. His plan would also allow Americans to buy insurance across state lines. Under the McCain healthcare plan, Washington would work with states to create a federally supported “best practice model” Guaranteed Access Plan (GAP) for Americans who are denied coverage due to pre-existing conditions. GAP premiums would be limited, and low-income Americans would qualify for financial assistance with costs. The healthcare platform the Republican Party unveiled during its September convention supports “balance” billing in Medicare, which would allow beneficiaries to add their own funds to government benefits. To supplement VA care, the senator would also allow veterans to seek treatment at private facilities, if necessary to get “timely and appropriate” care.

Sen. McCain supports linking physician and hospital compensation to performance—starting with Medicare and Medicaid. He would make reimbursement to those caring for beneficiaries dependent on outcomes. “Medicaid and Medicare should not pay for preventable medical errors or mismanagement,” the senator has said. The McCain plan calls for the development of national standards for evaluating treatments. It would also provide consumers with more information concerning treatment options and physician performance, and “require transparency regarding medical outcomes, quality of care, costs, and prices.”

To cut Medicare drug costs, Sen. McCain has proposed that more affluent older adults pay more for Medicare prescription drug coverage than lower-income seniors. To lower drug expenditures he would encourage the “safe re-importation” of drugs and faster introduction of generics. Sen. McCain’s healthcare plan calls for federal research into the prevention and treatment of chronic disease, which accounts for three-quarters of all healthcare spending. It also calls for public health initiatives to address rising rates of obesity and related chronic disease, and to deter smoking and provide mental health coverage. “By emphasizing prevention, early intervention, healthy habits, new treatment models, new public health infrastructure and the use of information technology, we can reduce healthcare costs,” the senator argues.

The McCain plan would also place greater emphasis on coordinated care provided by teams of healthcare workers. “Coordinated care—with providers collaborating to produce the best health care—offers better outcomes at lower costs,” he has said. “We must reform the payment systems in Medicaid and Medicare to compensate providers for diagnosis, prevention and care coordination” for beneficiaries with multiple chronic conditions. Acknowledging the growing need for long-term care, Sen. McCain has spotlighted the Program of All-Inclusive Care for the Elderly (PACE) and other state-based programs as “pioneering approaches for delivering care to people in a home setting.”

Sen. Barack Obama (D-Illinois) Sen. Obama supports sweeping changes in the nation’s healthcare system aimed at ensuring all Americans affordable, quality healthcare coverage. His plan calls for universal health coverage—it would mandate that all children have coverage—through a combination of private and expanded public health insurance. The senator’s plan would require employers to either offer coverage to employees, or pay the government a set amount to do so via a new public plan. (Small businesses, however, would be exempt from this requirement.)

Sen. Obama promises to create an affordable public health insurance plan open to those who cannot get coverage through their employers or existing programs, such as Medicaid, Medicare, or the State Children’s Health Insurance Program (SCHIP). This public health insurance plan would cover all “essential medical services, including preventive, maternity and mental health care.” The Obama healthcare plan calls for expanding eligibility for Medicaid and SCHIP. Low-income Americans who do not qualify for either but still need assistance would get federal subsidies to buy into the new public plan or another qualified plan. No plan would be permitted to refuse coverage to applicants with illnesses or preexisting conditions. States could continue to “experiment, provided they meet the minimum standards of the national plan.”

Sen. Obama would also create a “National Health Insurance Exchange” that would “act as a watchdog group and help reform the private insurance market by creating rules and standards for participating insurance plans to ensure fairness and make…coverage more affordable and accessible.” Insurers would be required to provide quality coverage at least as comprehensive as the new public heath insurance plan. They would also be required to “issue every applicant a policy and charge fair and stable premiums that would not depend upon health status.” In addition, insurance firms would be prohibited from “abusing their monopoly power through unjustified price increases.” Insurance companies and the new public plan would be required to report quality data and meet standards for health information technology (HIT). The senator would invest $10 billion a year for five years to ensure broad adoption of HIT that ensures privacy.

To improve outcomes and cut costs, Sen. Obama’s plan calls for greater emphasis not only on technology but also on research, prevention, and care coordination. Among other things, it would establish an institute to research the comparative effectiveness of interventions. Sen. Obama promises to “support implementation of programs and encourage team care that will improve coordination and integration of care of those with chronic conditions.” He is a supporter of the patient-centered “medical home” model, in which physicians, other healthcare providers, and patients collaborate closely to ensure appropriate, quality care. Not only will this model improve care, it will also save money by eliminating duplication of services in multiple care settings, he argues. “As president, I will encourage and provide appropriate payment for providers who implement the medical home model, including physician-directed, interdisciplinary teams, disease management and care coordination programs, quality assurance mechanisms, and health IT systems, which collectively will help improve care for those with chronic conditions,” he recently told the American Academy of Family Physicians. In keeping with the senator’s proposal, healthcare providers participating in the new public plan, Medicare, and other public healthcare programs would have to “utilize proven disease management programs,” report preventable medical errors, and quality and cost data. Those participating in the new plan, in Medicare, and National Health Insurance Exchange plans would also be “rewarded” for meeting quality standards.

Sen. Obama would allow Americans to buy drugs from other developed countries “if the drugs are safe and prices are lower” than in the U.S. He has also vowed to “prevent pharmaceutical companies from blocking cheap and safe generic drugs from the market” and to repeal the ban preventing the government from negotiating with drug companies for lower prices for the Medicare prescription drug program. The senator would also close the Medicare drug plan’s “doughnut hole” coverage gap. Sen. Obama has promised to “reduce waste in the Medicare system” by, among other things, eliminating subsidies to private Medicare Advantage plans. He has also promised to “reform the financing of long-term care to protect seniors and families” and to further improve the quality of elder care by training more healthcare workers.