NCPA - National Center for Policy Analysis


August 7, 2008

Healthcare reform will be one of the top issues of the 2008 presidential election, says Michael D. Tanner, a senior fellow with the Cato Institute.  In the face of widespread public demand for changes in the U.S. health care system, both Barack Obama and John McCain have offered detailed proposals for reform.

Sen. Obama's approach relies heavily on government mandates, regulations, and subsidies.  He would:

  • Mandate that employers provide health care coverage for their workers and that parents purchase health insurance for their children.
  • Significantly increase regulation of the insurance industry, establishing a standard minimum benefits package, and requiring insurers to accept all applicants regardless of their health.
  • Offer a variety of new and expanded subsidies to middle- and low-income Americans.

In contrast, John McCain emphasizes consumer choice and greater competition in the health care industry.  He would:

  • Move away from our current employment-based insurance system by replacing the current tax exclusion for employer-provided insurance with a refundable tax credit for individuals.
  • Sharply deregulate the insurance industry to increase competition.

Sen. McCain's proposal is far from perfect, but from a free-market perspective, it appears superior to Sen. Obama's plan, says Tanner.  Obama's plan, with its heavy reliance on government, leads to the same problems that bedevil universal health care systems all over the world: limited patient choices and rationed care.  McCain's proposal is much more consumer centered and taps into the best aspects of the free market.

Source: Michael D. Tanner, "A Fork in the Road: Obama, McCain, and Health Care," Cato Institute, Briefing Paper No. 104, July 29, 2008.

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