NCPA - National Center for Policy Analysis


October 24, 2008

Sens. John McCain and Barack Obama have each offered sweeping, and contrasting, prescriptions for how to reform the health care system.  The Wall Street Journal offers an analysis of the candidate's health care plans to help voters understand how their coverage and their expenses might change below.

The McCain health plan would:

  • Tax workers on health benefits they get from their employers
  • Give people tax credits of $2,500 per person, or $5,000 per family, to defray the cost of insurance.
  • Create high-risk insurance pools to cover people with pre-existing conditions.
  • Allow insurers to sell health plans across state lines.

The Obama health plan would:

  • Require large and medium-size employers to provide a health benefit or pay a fee.
  • Offer new options for the uninsured, including subsidies to buy coverage and a new federal plan.
  • Expand existing government programs that provide coverage to low-income people.
  • Require insurers to sell policies to anyone who can pay.

Both candidates have pointed to big problems in the health care system, including rising costs and the large number of people who aren't covered.  Below is a look at which groups of people might tend to do better, and worse, under each plan.

McCain's plan:

  • Among families making between $100,000 and $149,000 annually, 38 percent would save more than $2,500 a year on health costs.
  • That level of savings also would be realized by 41.5 percent of families with incomes between $50,000 and $99,000.
  • He also would make workers pay income tax on health benefits they get from their employers.

Obama's plan:

  • Among households earning between $50,000 and $99,000 annually, 60 percent would see health insurance costs decline by $250 or more, earning between $100,000 and $149,000, 66 percent would save at least $250.
  • All children must have insurance, employers must provide health benefits or pay a fee and small companies would get tax credits to help pay for health insurance.
  • Losers could include some healthy people who don't qualify for the subsidies; that's because individual policy premiums could go up once insurers are required to sell policies to all comers.

Source: Anna Wilde Mathews, "Health-Care Fixes: Plan vs. Plan," Wall Street Journal, October 23, 2008.

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