For some time now, the debate over how best to reform the American health‐care system has been dominated by the question of “universal coverage,” how to provide health insurance to those without it. That remains the battle cry of Sen. Hillary Clinton, who promises to provide “health insurance for every single American.”
However, if John McCain and Barack Obama become the candidates for president this fall, we may see a subtle but useful shift that could actually lead to improving how health care is provided in this country. Both McCain and Obama recognize that the key question in health‐care reform is not coverage, but cost.
Clinton and Obama have clashed over the question of an individual mandate (requiring every American to purchase insurance). Hillary supports such a mandate, claiming that it’s the only way to ensure universal coverage. Obama opposes one, arguing that “the reason people don’t have health insurance is not because they don’t want it, it’s because they can’t afford it.” Instead of a mandate, therefore, Obama would focus on a combination of cost cutting and subsidies to reduce the price of insurance. While he believes that his proposal would greatly increase the number of Americans with insurance, he admits it will fall short of 100‐percent coverage.
John McCain also steers clear of attempts at universal coverage. “Bringing costs under control is the only way to stop the erosion of affordable health insurance,” McCain says on his website. A McCain spokesman adds, “You worry about the uninsured, but they are a symptom of a larger problem. Unless you do something about cost, you are chasing your proverbial tail.”
Obama and McCain are reflecting a growing consensus among health‐care experts that the continued growth of health‐care spending is unsustainable and that something must be done to bring costs under control. The United States spends roughly 17 percent of its Gross Domestic Product on health care, far more than any other country, and that is projected to rise to 20 percent of GDP by 2015. While that spending has undoubtedly helped buy the highest quality health care in the world, the distribution of costs has clearly made care unaffordable for many businesses and individuals. Nor should we forget that the skyrocketing cost of government health‐care programs like Medicare and Medicaid is threatening to bury our children under a mountain of debt and taxes.
That is not to say that Obama and McCain agree on how to reduce health‐care costs. Obama would rely much more on the heavy hand of government. Among other things, he would impose caps on insurance premiums and price controls on drug companies. He would have the government establish national practice standards for doctors. And, he would create a National Health Insurance Exchange as a sort of clearinghouse to make it easier for businesses and individuals to shop for the best insurance.
McCain, in contrast, would attempt to promote greater competition among private health insurers. He would allow people to buy insurance plans across state lines, which will help drive down rates. And he would try to shift away from our current employment‐based insurance system toward a system where individuals purchase and own their own insurance plans. He would do this by replacing the current tax break for employer‐provided insurance with a refundable $2,500 tax credit for individuals, and $5,000 for families. The idea is that once people start to buy their own insurance, they’ll be in a position to insist on lower prices and higher quality — just as they do with every other product they buy.
Both Obama and McCain would take other steps as well, including encouraging greater use of generic drugs, promoting the use of electronic medical records, emphasizing prevention, and providing incentives for more integrated medicine — treating illnesses rather than symptoms. Studies suggest, however, that savings from these proposals may be less than either candidate has hoped.
Overall, McCain has the better proposal. Obama’s plan, with its heavy reliance on government, leads to the same problems that bedevil universal healthcare 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.
But regardless of who becomes president, we can expect major changes for the American health‐care system. And it’s a good sign that we’re beginning to debate the right things.