The presidential election is less than 75 days away.  With a focus on foreign policy and our economy, not to mention energy, is health care still a relevant topic?

You would think so, according to a recent Commonwealth Fund survey that indicates the vast majority of Americans are dissatisfied with the U.S. Healthcare system.  Nine of ten people surveyed said the next President should propose reforms that would improve the quality of healthcare, ensure that all Americans have affordable care and reduce the number of uninsured.

These are lofty expectations and, not surprisingly, both candidates have announced their health reform plans.  So, rather than relevancy, the real question is whether or not their plans will be effective, or palatable…

Not surprisingly, there is a huge divide on approach as the candidates reflect the basic ideological differences between their two parties.  McCain wants consumers to be responsible for purchasing health insurance and would provide tax breaks for those who do so.  Obama wants the government to work in partnership with employers and health insurers to provide portable and affordable health care for all Americans.  

Of the two, McCain’s plan might be more revolutionary as Obama has avoided the excessive ambition that politically killed the 1993 Clinton health reform attempt.

At the heart of McCain’s plan is a $2500 refundable tax credit for individuals and $5000 for families.  In gaining the credit, workers would be taxed for their portion of their workplace coverage insurance if paid by their employers.  In addition, he would offer federal assistance to states to create high-risk pools that would contract with insurers to cover consumers who have been rejected in the open market. 

Obama’s plan is founded on a premise of universal coverage that would require insurers to accept all applicants and would require that parents obtain insurance for their children.  His plan would require employers to provide insurance or contribute to the cost.  He would exempt small businesses but they would have a 50% tax credit to incent employee coverage.  For people who do not qualify for Medicaid, he would offer a subsidy to buy into the public plan or purchase a private insurance plan.

I think both of these plans present challenges if implemented.

The potential flaw in McCain’s plan is that his tax credit might encourage young and healthy workers to forgo company coverage, purchasing insurance on their own rather than paying income taxes on the benefit.  That might leave employers with only costly sick workers to insure and create a “death spiral” for employer-based coverage where the costs would eventually collapse the entire employer-based insurance model that has existed in the U.S. for decades and covers a large percentage of our population.   Once that would happen, older individuals or those with chronic or pre-existing medical conditions would not be able to obtain or afford insurance with just the tax credits in hand. 

Regarding McCain’s risk-pool concept, while these have around for the past 30 years, they currently cover only a few hundred thousand people and would take billions to be transformed into a viable federal safety net.

The potential flaw with Obama’s plan is his emphasis on dramatically and quickly increasing the number of people who have health insurance.  This will likely require spending significant money upfront and lead to unsustainable costs.  In addition, the design might motivate adults to not purchase even affordable insurance, wait until they're sick to seek coverage, and this would inevitably drive premiums higher.  As a result, I’m skeptical he can deliver on his promise to reduce a typical family’s health insurance premium by $2500 by the end of his first term. 

Both candidates are convinced they have the answer.  I’m not enamored with either.  I encourage you to spend the next 75 days to flush out the facts and consider health care a relevant part of your voting decision.