Lewin Group Analysis Predicts How McCain, Obama Health Care Proposals Would Affect Uninsured U.S. Residents

Main Category: Health Insurance / Medical Insurance
Article Date: 10 Oct 2008 - 5:00 PDT

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The health care proposal announced by Republican presidential nominee Sen. John McCain (Ariz.) would reduce the number of uninsured U.S. residents by about 21.1 million by 2010, and the plan announced by Democratic presidential nominee Sen. Barack Obama (Ill.) would reduce the number by about 26.6 million, according to an analysis released on Wednesday by the Lewin Group, the AP/Houston Chronicle reports.

McCain Proposal
The McCain proposal would replace an income tax break for employees who receive health insurance from employers with a refundable tax credit of as much as $2,500 for individuals and $5,000 for families who purchase coverage through their employers or the individual market. In addition, the proposal would allow the purchase of health insurance across state lines.

The report estimates that the number of people with employer-sponsored coverage would decrease by about 16 million, in part because some employers would drop coverage for employees (Freking, AP/Houston Chronicle, 10/9). According to the report, the proposal would increase the number of residents with private health insurance by 26.5 million and reduce the number enrolled in public programs by 5.4 million.

John Sheils, senior vice president of the Lewin Group, said that the proposal would reduce the number of uninsured, healthy young adults by four million to five million because the amount of the tax credits would exceed the cost of premiums for residents in that group (Reichard, CQ HealthBeat, 10/8). However, he said, "The people who are sick are going to have a lot of trouble affording coverage, even with the credit." More than half of employees who would lose employer-sponsored health insurance under the proposal have a chronic medical condition that would limit their ability to purchase health insurance in the nongroup market (AP/Houston Chronicle, 10/9).

The report estimated that the proposal would cost $2.05 trillion from 2010 to 2019.

Obama Proposal
The Obama proposal would establish a health insurance "exchange" that would allow residents to choose between private health plans and a public plan, with subsidies for lower-income residents, as well as expand eligibility in public programs such as Medicaid. The proposal also would require health insurers to accept all applicants, regardless of their health status CQ HealthBeat, 10/8).

According to AP/Houston Chronicle, an estimated 16 million uninsured residents would obtain health insurance through public programs, and about 10 million would use the subsidies to obtain coverage in private plans. Sheils said that about half of uninsured residents with chronic medical conditions would gain health insurance under the proposal (AP/Houston Chronicle, 10/9). The public plan would have lower premiums as a result of lower reimbursement rates for health care providers, the report found (CQ HealthBeat, 10/8). Sheils said that about half of residents with chronic medical conditions would have health insurance under the proposal (AP/Houston Chronicle, 10/9).

The report estimated that the proposal would cost $1.17 trillion from 2010 to 2019.

Sheils said that Congress likely would not approve either proposal intact. He added, "I don't think either of them is very credible ... because neither of these plans are paid for" (CQ HealthBeat, 10/8).

Reaction
When asked to comment on the findings, McCain spokesperson Ben Porritt pointed to an analysis prepared for the campaign by HSI Network, which estimated that the McCain proposal would cover two million more of the uninsured than the Obama plan.

Neera Tanden of the Obama campaign said the HSI analysis is "completely out of line with any other analyses put out by independent organizations." She also questioned the Lewin finding regarding the number of people with health conditions who would obtain coverage through McCain's "Guaranteed Access Plan," saying that it isn't sufficiently funded under the McCain proposal (CQ HealthBeat, 10/8).

Comparison of Proposals
Long Island Newsday on Thursday examined how the McCain and Obama proposals offer "starkly different approaches to reforming American health care," as the plans would either "upend" or "build on" the current employer-sponsored health insurance system, respectively (Moore, Long Island Newsday, 10/9). McCain and Obama outlined their proposals in New England Journal of Medicine perspective pieces published this week. The McCain perspective piece is available online. The Obama perspective piece also is available online.

Additional Developments
Summaries of several other recent developments related to health care issues in the presidential election appear below.

• Debate analysis: Both McCain and Obama during the second presidential debate on Tuesday promised to "keep health care a priority, even in tough economic times," but some observers question whether the recent enactment of the $700 billion bailout for Wall Street firms will allow health care reform next year, Bloomberg reports. Robert Laszewski, president of Health Policy and Strategy Associates, said, "After what happened over the past month, where's anybody going to get the money?" adding, "The chances of health reform happening next year are now about zero" (Marcus, Bloomberg, 10/8).
  
  
• Elizabeth Edwards: Elizabeth Edwards, the wife of former Democratic presidential candidate and former Sen. John Edwards (N.C.), on Tuesday during a press conference at the Virginia Capitol said that the McCain health care proposal would prompt employers to drop health insurance for employees and increase taxes for middle-income families, the Richmond Times-Dispatch reports. In addition, Elizabeth Edwards, who has incurable breast cancer, said that neither she nor McCain, who has had skin cancer, could obtain health insurance under the proposal because of their pre-existing medical conditions. She also said that the tax credits provided by the proposal would not cover the cost of health insurance for the average family (Whitley, Richmond Times-Dispatch, 10/8).
  
  
• Healthcare for America Now: HAN plans to launch a $4.3 million advertising campaign that will criticize the McCain health care proposal, The Hill reports. According to The Hill, the campaign will include television and radio advertisements in Ohio that feature "talking points used by Obama and his campaign." The ads will state that the McCain proposal would prompt employers to drop health insurance for 20 million employees. In addition, HAN plans to spend $500,000 on direct mail and telephone campaigns (Young, The Hill, 10/8).
  
  
• Health care reform: The next two years are "ripe for reforming the U.S. health care system," but "it won't be the complete overhaul that advocates favor," health care and political experts said on Tuesday during a forum hosted by the Nashville Health Care Council, the Memphis Commercial Appeal reports. The forum included former Senate Majority Leader Bill Frist (R-Tenn.), a heart surgeon; John Podesta, president of the Center for American Progress and a chief of staff for former President Bill Clinton; political consultant Dick Morris; Chris Jennings, a health care adviser to Clinton; and Charles Kahn, president of the Federation of American Hospitals. During the forum, participants agreed that the Democratic majority will increase in both chambers of Congress this year, a development that will make health care reform more likely. Podesta said, "I think health care is a more front-and-center issue. The idea of health coverage is a centerpiece of Obama's campaign and, although McCain has very different ideas, he has certainly put a lot of focus on it." However, Morris said that the U.S. will not have "financial wherewithal" for health care reform as a result of the recently enacted $700 billion financial bailout for Wall Street firms (Locker, Memphis Commercial Appeal, 10/7).
  
  A webcast of the forum is available online at kaisernetwork.org.
  
  
• Medicare benefits under McCain proposal: A recent Wall Street Journal article that said McCain would seek to reduce Medicare and Medicaid benefits to finance his health care proposal "mischaracterized the plan itself," McCain senior policy adviser Douglas Holtz-Eakin said during an interview on Tuesday, CQ HealthBeat reports. According to the article, McCain would seek to finance the proposal with "major reductions to Medicare and Medicaid ... in a move that independent analysts estimate could result in cuts of $1.3 trillion over 10 years to the programs." During an interview with CNN anchor John Roberts, Holtz-Eakin said that McCain would finance the proposal through increased use of preventive care and disease-management programs in Medicare and Medicaid, not through reductions in benefits (Reichard, CQ HealthBeat, 10/7).
  
  
• Obama ad: The Obama campaign has released a second ad that criticizes the McCain health care proposal, the Boston Globe's "Political Intelligence" reports. According to the ad, the McCain proposal would deregulate the health insurance industry, and the Obama plan would require health insurers to cover preventive care and accept applicants with pre-existing medical conditions. The ad states, "On health care, there are two sides." During a campaign event in New Mexico on Monday, McCain criticized the ad. He said, "On health care, Senator Obama has been misleading you about my plan to give you more money for health care, and he has been equally misleading about his own plans" (Rhee, "Political Intelligence," Boston Globe, 10/6).
  
  
• Palin criticizes Obama proposal: Republican vice presidential nominee Alaska Gov. Sarah Palin recently accused "Obama of misleading Americans about McCain's health care plan but offered an inaccurate explanation" of the proposal, the Washington Post's "The Trail" reports. Palin said that, under the proposal, "every middle-class American family will have a $5,000 credit, tax credit, to buy the health care coverage that you choose" and that "Barack Obama is calling that a tax." She added, "Our health care plan will give millions of middle-class Americans access to better health care without costing them a dime." In addition, Palin said that the Obama health care proposal would place "expensive mandates on small businesses" (Bacon, "The Trail," Washington Post, 10/7).
  
  
• Public opinion: Dow Jones on Tuesday examined how "neither presidential candidate has staked out a health care position that is resonating strongly with Americans, unless they are uninsured or fear they soon could be." According to Dow Jones, other than a "few overlapping ideas on preventive care and health information technology, Sens. Barack Obama and John McCain have dramatically different views on how to fix what ails the nation's health care system" (Gerencher, Dow Jones, 10/7).
  
  
• Service Employees International Union: SEIU has released a new television ad that criticizes the McCain health care proposal, the Post's "The Trail" reports. The ad, which will air in Pennsylvania and Wisconsin, indicates that the proposal would increase taxes for middle-income U.S. residents. In the ad, an announcer says, "McCain's health care plan would raise taxes for many families and would deny coverage for pre-existing conditions like cancer." The ad will air for at least one week at a cost of $1 million. SEIU also plans to send mailers that compare the McCain and Obama health care proposals to 390,000 "undecided health care workers" in Colorado, Iowa, Michigan, New Hampshire, New Mexico, Ohio, Pennsylvania, Wisconsin, Virginia and Wisconsin. The mailers read, "Only Barack Obama's plan controls costs, expands coverage and holds insurance companies accountable." In addition, SEIU plans to send an informational DVD about health care issues related to seniors to voters in Indiana, Iowa, Michigan, Ohio, Pennsylvania and Wisconsin (O'Keefe, "The Trail," Washington Post, 10/6).

Broadcast Coverage

• CNN's "Lou Dobbs Tonight" on Wednesday included a discussion with David Cay Johnston, an author and journalist about comments that McCain and Obama made during the debate about health care and other issues (Dobbs, "Lou Dobbs Tonight," CNN, 10/8). The complete transcript is available online.
  
  
• NPR's "News & Notes" on Wednesday included a discussion with Mary Frances Berry, a history professor at the University of Pennsylvania, and Ron Christie, a former special assistant to President Bush about comments that McCain and Obama made during the debate about health care and other issues (Chideya, "News & Notes," NPR, 10/8).
  
  
• NBC's "Countdown with Keith Olbermann" on Wednesday included a discussion with New York Times columnist Bob Herbert about the McCain health care proposal (Olbermann, "Countdown with Keith Olbermann," NBC, 10/8).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

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