It's no secret that affording health care is a top issue for North Carolinians. Workers in North Carolina are losing coverage through their employers at nearly twice the national rate. Since the year 2000, health plan premium rates have risen 5.3 times faster than wages in North Carolina – meaning skyrocketing health costs have eaten up raises for years for many workers.
Enter the presidential candidates. Senators McCain and Obama have radically different notions of how to tackle this exploding problem. Growing economic uncertainty is now bringing health care availability and cost front and center. And North Carolinians, given the increasing ringing of health care alarm bells in our state, should be particularly interested.
McCain's vision for health care reform is much like his vision for our financial system. As he recently wrote, "opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."
To do this, McCain proposes new taxes on workers and their employers targeted at the health benefits people get through their jobs. He would then use those taxes to fund a $5,000 health care tax credit for families ($2,500 for individuals). McCain would also deregulate the health insurance market and allow insurers to sell coverage in any state without having to meet that state's consumer protection laws and regulations. People whose employers decided to stop offering coverage would be "on their own" to "shop around" for a health plan.
With 4.5 million people in North Carolina getting their coverage through their job, McCain's plan would mean a radical change in how North Carolinians get their health benefits since the loss of the tax exemptions would cause many employers to drop health coverage. Workers could then try and buy coverage on their own with their tax credit. This might work for younger and healthier employees, but anyone who is older or has a chronic health condition could be quickly priced out of the individual market or even denied coverage – something that is currently prohibited for people who get health coverage through their job.
McCain proposes beefing up current state high risk insurance pools to allow people with chronic diseases to buy coverage, but current risk pools nationwide have enormously high premium rates and only cover a tiny fraction of the population. Nationwide, fewer than 200,000 people are covered.
McCain's push of people into the individual insurance market contains other downsides as well. Administrative costs for individual coverage are twice what they are in the employer group market. This is because insurance companies spend enormous amounts of money attempting to only insure the healthiest individuals by identifying and charging higher rates to those with pre-existing conditions.
These practices don't just mean that it's harder and more expensive for people to get health insurance if they aren't 25 years old and built like a marathon runner. More administrative expenses mean fewer profits for insurers. Companies then try and recoup those profits by offering individual plans that have much higher deductibles and co-pays than workers get with an employer health plan.
Finally, North Carolina consumer protection regulations – like guarantees of breast and cervical cancer screenings, impartial review of health plan decisions, and direct access to OB/GYNs – would be eliminated by McCain's plan.
In many ways, Obama's reform plan contains much less radical surgery for our health system.
He proposes an expansion of existing public programs for children and low income people, subsidies for small businesses to encourage them to buy private health plans, and creation of national menu of public and private health plans people could purchase if they can't get coverage through an employer. Subsidies would be provided to people who couldn't afford a standard premium.
Obama would require large businesses to offer health coverage or contribute to a public health plan fund. Children would be required to have health coverage and insurance companies would be prohibited from charging people more because of pre-existing health conditions. Obama proposes financing his plan through cost reforms and letting Bush-era tax cuts for people making over $250,000 expire.
A recent analysis of McCain's plan in the respected journal Health Affairs found that under McCain's plan some would gain coverage but many would lose coverage as well. While starting out as a wash, over time the number of uninsured people would keep growing. Obama, in contrast, aims his plan at covering everyone in the country. While estimates differ, most agree that Obama would not only cover all children but eventually bring at least about half the currently uninsured into the health system.
In the end, North Carolinians face a clear choice between the presidential candidates on the health issue. McCain's proposal to move our health system towards "on your own" health insurance are a sharp contrast to Obama's plans to build on our current employer-based system while expanding public health programs for children and lower-income citizens.
Adam Searing is the Director of the North Carolina Health Access Coalition