Obama vs McCain: Comparison of Health Care Plans

Both of the major U.S. 2008 presidential candidates are proposing radical changes to the health care system, as it is clear that the system is teetering. According to Fortune Magazine,

The U.S. now has 47 million uninsured, and costs are out of control. The Department of Health and Human Services predicts that if things continue as they are, health spending will almost double by 2017 to $4.3 trillion, or one-fifth of GDP, vs. 16% today.

The ins and outs of each program are complex, so I’ll try to simplify them here. Fortune states that essentially,

McCain wants to create a kind of national insurance market that shoves more decision-making power into the hands of consumers; the Democrats are aiming for a Medicare-like federal superprogram.

Information reported in The Wall Street Journal, drawing from analysis by The Tax Policy Center, provides a great comparison of Obama vs McCain’s health care plans. The comparison is summarized below.

Obama McCain
Cost: $1.6 trillion Cost: $1.3 trillion, assuming substantial cuts to Medicare and Medicaid
New Coverage: adds 18 million in first year and 34 million in 10 years New Coverage: adds 5 million
Increases governmental regulation Taxes employer-provided benefits and provides a $2500/individual tax credit for those who find own plans.

Impact: An estimated 20 million young people may leave employer-sponsored systems to get a better deal for coverage in the open market

Attributes the problem to system inefficiencies and a focus on delivering procedures rather than medical solutions Attributes problem to employers having to increase benefits plans due to demand from employees and unions
May increase price due to incorporating cost of regulation Buying across state lines may undermine state insurance regulation
Addresses the problem in five areas:

a. Providing more information for informed choice

b. Pays physicians for producing outcomes rather than performing procedures

c. Make visible the hidden expenses of the uninsured

d. Enabling pooling of small businesses and individuals to get price breaks

e. Encouraging preventive measures

May increase price due to higher administrative costs on the open market

Here’s a few additional comments and observations:

  • It seems there is quite a difference in costs for the newly covered person, in terms of cost/newly insured. For Obama, that is roughly $47,058; for McCain, it is $260,000.
  • The general consensus seems to be that McCain’s plan is either bolder or a gamble, depending on the political party of the speaker

For more in depth reading:
WSJ: Why Obama’s Plan is Best
Fortune Magazine: Why McCain’s Plan is Best
Benefits Execs Prefer Obama’s Plan
Carly Fiorina Extols the Benefits of McCain’s Plan


  1. […] a recent post, I compared the health care proposals of Sen. Obama and Sen. Obama. However, to evaluate those […]

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