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A Fork in the Road

Obama, McCain, and Health Care

by Michael Tanner

No. 104

July 29, 2008

Executive Summary

In contrast, John McCain emphasizes con-

Health care reform will be one of the top issues

sumer choice and greater competition in the

of the 2008 presidential election. In the face of

health care industry. He would move away from

widespread public demand for changes in the

our current employment-based insurance system

U.S. health care system, both Barack Obama and

by replacing the current tax exclusion for

John McCain have offered detailed proposals for

employer-provided insurance with a refundable

reform.

tax credit for individuals. At the same time he

Senator Obama's approach relies heavily on

would sharply deregulate the insurance industry

government mandates, regulations, and subsi-

to increase competition.

dies. He would mandate that employers provide

Senator McCain's proposal is far from perfect,

health care coverage for their workers and that

but from a free-market perspective, it appears

parents purchase health insurance for their chil-

superior to Senator Obama's plan. Obama's plan,

dren. He would significantly increase regulation

with its heavy reliance on government, leads to

of the insurance industry, establishing a stan-

the same problems that bedevil universal health

dard minimum benefits package, and requiring

care systems all over the world: limited patient

insurers to accept all applicants regardless of

choices and rationed care. McCain's proposal is

their health. He would offer a variety of new and

expanded subsidies to middle- and low-income

much more consumer centered and taps into the

Americans.

best aspects of the free market.

Michael Tanner is a senior fellow at the Cato Institute and coauthor of Healthy Competition: What's Holding

Back Health Care and How to Free It.

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