Health Care Spin

• Create a national system of competing, federally approved private insurance policies and a public plan that offers coverage similar to the Federal Employees Health Benefits Plan, which provides coverage to federal employees and members of Congress. Individuals and small businesses could purchase coverage through this national exchange.
• Set national standards for private plans and forbid insurance companies from denying coverage because of preexisting conditions.
• Require that children have insurance, offer tax credits to low-income families, and expand coverage under Medicaid and the State Children's Health Insurance Program. Obama has not specified what penalty parents would face if they don't have health coverage for their kids.
• Impose a "pay-or-play" requirement under which large companies would either have to offer coverage or pay a portion of premiums for workers, or pay a percentage of payroll into the national public plan. Small businesses would be exempt from the requirement, but could qualify for a refundable tax credit of up to 50 percent of premiums paid for their employees, to encourage them to offer coverage directly. Obama also wants to cover some of the costs of expensive health coverage businesses face for some employees.

Both candidates say they'll push for measures that would lower health care costs, such as greater use of electronic health records, coordinated care and prevention efforts.

Update, Oct. 20: In a conference call with reporters on Oct. 17, Holtz-Eakin made clear that the campaign planned on getting "savings" from Medicare and Medicaid through such measures as reducing fraud and abuse, expanding the use of information technology in health care, and more quickly adopting generic drugs. He said, "No service is being reduced. Every beneficiary will in the future receive exactly the benefits that they have been promised from the beginning."

What Experts Say
Independent studies generally agree on one thing – Obama's plan would cover more people. But they differ widely on how much each plan would cost, and particularly on how McCain's plan to change the tax rules on all existing employer-provided coverage would work out. One study estimated that McCain's plan would cut the number of uninsured Americans by 21 million, while another put the number at only 1 million.

The Lewin Group released an analysis last week concluding that McCain's plan would cover somewhat fewer people than Obama's, but at a much higher cost. An earlier study by the Urban Institute-Brookings Tax Policy Center predicted that Obama's plan would cover far more people than McCain's, at a moderately higher cost. And two dueling studies published in the journal Health Affairs found flaws in both plans and concluded that neither would do much to reduce the number of the uninsured.

The estimates may vary so widely because both candidates are vague about important details, such as the income levels at which subsidies would be offered or, in Obama's case, the penalty parents would pay for not insuring children. Analysts have had to make guesses about such details, and they also must make assumptions about what would induce individuals to buy coverage, or drive employers to drop it. 

Lewin Group study: There are currently 45.7 million Americans without health insurance, according to the Census. The Lewin Group, a private health care consulting group whose studies have been used in the past by both Republicans and Democrats, projected current trends would lead to 48.9 million uninsured Americans by 2010. The study predicted that Obama's plan would reduce that number by 26.6 million, McCain's by 21.1 million. By 2018, when the uninsured would number 59.2 million under current law, Obama's plan would reduce that number by 32.3 million and McCain's would drop it by 21.1 million. It also found that McCain's plan would result in a net cost of $2.05 trillion over 10 years and that Obama's net cost would be $1.17 trillion over the same time period.

Tax Policy Center study: The TPC, a nonpartisan group headed by Len Burman, former head of tax policy in the Clinton administration, said Obama's plan would reduce the number of uninsured by about 18 million in 2009 and by 34 million by 2018, an estimate close to the Lewin Group's. But it found that McCain's plan would reduce the number of uninsured by about 1 million in 2009 and by 5 million in 2013, at which point the number of the uninsured would start to rise because the tax credits don't grow as quickly as premium costs. The Obama plan would cost about $1.6 trillion over 10 years, according to the report, and the McCain plan would cost about $1.3 trillion.

The Tax Policy Center study goes into greater detail on how the plans affect the tax bills of Americans. The Lewin report includes breakdowns of coverage of the uninsured by age, income and for those with chronic conditions — the latter group fares better under Obama's plan, as half are projected to gain coverage, and 24 percent would be covered under McCain's.

Analyses published in September in Health Affairscast critical eyes on both plans. Those critiquing McCain's plan said it initially would result in a net decrease of the uninsured of 1 million, though there would be a net increase of the uninsured within five years; they added that "the decline of job-based coverage would force millions of Americans into the weakest segment of the private insurance system – the nongroup market – where cost sharing is high and covered services are limited." The authors said the plan "would diminish the security of coverage for most Americans," especially those in less-than-perfect health.