By 2010, there will be 48 million people living in the U.S. without health insurance. Suffice it to say, whomever is elected president will have to have a plan that can significantly reduce those numbers and have healthcare remain affordable at the same time.
But according to an independent comparative analysis by the Lewin Group (Falls Church, Virginia), the two presidential hopefuls' plans have the potential to reduce the number of uninsured by nearly half or better.
The group released its analysis of the proposed McCain and Obama healthcare reform plans on Wednesday. McCain's plan, which would expand private insurance coverage, would cost nearly $2.05 trillion over the 2010 through 2019 period and reduce the number of uninsured by 21.1 million.
Obama's plan, which would expand coverage under public programs, would cost $1.17 trillion and would reduce the number of uninsured by 26.6 million.
The McCain plan increases private coverage by 26.5 million by providing refundable tax credits ($2,500 single/$5,000 family) for the purchase of private insurance, including individuals purchasing non-group coverage. Public coverage would fall under the McCain plan by 5.4 million people as Medicaid enrollees become covered under private insurance.
The group's findings also show that the Obama plan increases the number of people with public insurance by 48.3 million by expanding Medicaid for low-income adults and creating a new national plan. Private insurance coverage would decline by 21.6 million people under the Obama proposal, as employers and individuals shift to a new lower-cost national plan.
Under the McCain plan, families will save an average of $1,411 per year, reflecting that the tax credit will generally be larger than the income taxes paid on employer-sponsored benefits. Families will save an average of $426 per year under the Obama plan.
Here's how the findings further break down.
The Obama plan requires insurers to offer guaranteed issue coverage for all applicants and prohibits the use of health status in setting premiums for employers and individuals.
The McCain plan enables individuals and employers to purchase coverage from a state permitting the use of health status in setting premiums, even though they live in a state that now limits or prohibits the practice. The McCain plan then provides federal subsidies for high-risk pools that would be available to those denied coverage due to health status.
"Both candidates' plans have features designed to reduce healthcare costs," John Sheils, senior vice president of the Lewin Group, said in a statement. "Sen. McCain's plan allows people to purchase coverage without state-mandated benefits by permitting the sale of insurance across state lines and increases incentives to purchase lower-cost health plans by eliminating the income tax exclusion for employer-sponsored health benefits."
Sheils added, "The Obama healthcare reform plan establishes a minimum standard of covered benefits and requires the use of proven care coordination of services for the chronically ill in Medicare and other federal programs."
Lewin estimates also reflect the effect of other important provisions in these plans. The coverage and cost estimate for the Obama plan reflect his proposed small-employer tax credit for insurance and a new federally subsidized reinsurance program to cover catastrophic health expenses in employer plans.
The McCain plan estimates also reflect the new high-risk pools and a new option for states to cover Medicaid participants under private insurance with the help of the new tax credit.
Lisa Chimento, executive vice president of the Lewin Group, explained the methodology that Sheils used to ensure that the Lewin study was intended to be unbiased. "All of the data was gathered from official campaign materials and statements available in the public domain," she said. "Additionally, we invited each campaign to provide Lewin with copies of any information they felt was relevant to the analysis and to attend this news conference. Yesterday we sent them preview copies of the report."
The McCain and Obama healthcare proposals were compared using a well-validated model, the Health Benefits Simulation Model. Lewin analyses are primarily based upon this model of the U.S. healthcare system, which has been continually refined since 1989, when it was first used to estimate the cost of alternative universal coverage proposals for the Bipartisan Congressional Commission on Health Care.
Since then, the model has been used to analyze a broad range of health reform proposals at the state and federal levels.
The Lewin Group is a national healthcare and human services consulting firm.