Yesterday, Health Affairs published a set of papers that critiqued the health plans of presidential candidates John McCain and Barack Obama, along with a paper by Wharton economist Mark Pauly outlining areas of compromise between the two plans. [All three papers are free access online–extended through the election. Related content on Health Affairs Blog includes: a conversation between three of the authors, a defense of Obama’s plan by David Cutler, a defense of McCain’s plan by Tom Miller, and a look at the VP candidates’ debate.]
In their article, University of Michigan professor Thomas Buchmueller and coauthors argued that the McCain plan would strip consumers of protections while producing few actual gains in the number of Americans with health coverage. Meanwhile, Joe Antos of the American Enterprise Institute and coauthors faulted the Obama plan for attempting to impose behavioral changes through top-down regulation, rather than addressing perverse economic incentives that drive health care costs.
News media and bloggers jumped into the fray. New York Times columnist Bob Herbert, in the third most-emailed Times story of the day, wrote of McCain’s “radical agenda,” saying: “These are changes that will set in motion nothing less than the dismantling of the employer-based coverage that protects most American families.” His op-ed hit a nerve, with over 400 comments to date.
Ezra Klein, who blogs at The American Prospect, elaborated on the decline of employer-based insurance under the McCain plan: “Its first-order effect would be to take employer health insurance away from 20 million Americans who currently have it…. That, of course, is not the whole story. Kicked out of employer pools and pocketing a shiny new tax credit, a fair number may seek care on the individual market. The problem, though, is that care on the individual market is far worse.”
Over on the Wall Street Journal blog, the “Washington Wire,” Laura Meckler offered clarification on how McCain’s plan would aim to keep people in employer insurance plans: “McCain’s economic adviser Douglas Holtz-Eakin argues that many would stay in employer coverage, partly because of a key policy decision the McCain camp made in designing its plan. In trade for the new, generous tax credit, McCain would subject the value of health benefits to the income tax, meaning workers would have to pay taxes on the value of whatever health insurance employers provide. But neither employers nor workers would have to pay Social Security taxes on those benefits.”
Kevin Sack on the New York Times politics blog, “The Caucus,” highlighted the potential loss of coverage under McCain’s plan: “Senator John McCain’s top domestic policy adviser, former Congressional Budget Office director Douglas Holtz-Eakin, recently said in a conference call with reporters that Mr. McCain’s health care proposal would ‘put 25 to 30 million individuals out of the ranks of the uninsured, into the ranks of the insured.’ In an article released Tuesday, a panel of prominent health economists concludes that Mr. Holtz-Eakin’s projection is off by, well, 25 to 30 million.”
CQ Politics spoke with Neera Tanden, domestic policy director for the Obama campaign, who said the net new costs to the government under Obama’s plan would only reach $50 billion to $65 billion annually. However, Antos and colleagues believe that the Obama campaign’s cost projection may understate the true cost of its plan by roughly $100 billion annually.
Both plans, however, would ultimately face uphill battles in Congress, concluded Perry Bacon, Jr., on the Washington Post’s political blog, “The Trail.”