Organizing for America | Isabel Acevedo's Blog: Healthcare Now

Healthcare Now

By Isabel - Oct 16th, 2008 at 2:56 pm EDT

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The World Health Organization (WHO), the directing and coordinating authority for health within the United Nations system, just released its 2008 report calling for universal health care. Dr Margaret Chan, Director-General of WHO tells us that "A world that is greatly out of balance in matters of health is neither stable nor secure." And this is a problem that is not limited to undeveloped nations. We have this problem is right here in the United States. Tajikistan spends less than $100 per person on health care and has an average life expectancy of 70, a figure comparable to the United States, which spends more than $2,500 a person on health care. This discrepancy of expenditure might be explained with the fact that only 0.1% of our health budget is allocated to health systems research, the kind of research that policymakers use to decide how money is spent. Of course, the pharmaceutical industry in our country has as great impact on health care: the average expenditure on prescription drugs in 2005 was $1,141 per person, twice the average in Canada, Germany and Britain, and 10 times the average in Mexico.

Both candidates say they'll push for measures that would lower health care costs. They both promote the use of electronic health records and coordinated care and prevention efforts. They both want to reduce the impact of the pharmaceutical industry on high drug cost by promoting the importation of safe medicines and the faster introduction of generic drugs. But how do the plans differ?

The Obama-Biden health care plan is not a government-run program that requires health care for every American. It does, however increase the federal government's role in health care by requiring insurance companies to cover pre-existing or chronic conditions and requiring all employers other than very small businesses to offer coverage to their employees or pay part of the costs to cover them. The plan also includes private insurance options. In other words, the plan builds up on the existing health care system, and uses existing providers, doctors and plans to ensure healthcare is affordable and accessible to every American.

Under the plan, if you like your current health insurance, nothing changes, except your costs will go down by as much as $2,500 per year. If you don't have health insurance, you will have a choice of new, affordable health insurance options. The federal government has remained inactive on the health care issue. This has created big health care coverage discrepancies among states. The Obama-Biden plan creates minimum federal standards that will stabilize healthcare availability among states, while giving local governments room for further experimentation.

One of the biggest problems that we have is that individuals with pre-existing conditions are being denied health insurance or perhaps the insurance they are offered is too expensive. To solve this specific problem, the Obama-Biden plan requires insurance companies to cover pre-existing conditions so all Americans regardless of their health status or history can get comprehensive benefits at fair and stable premiums. The plan increases competition between insurance companies and establishes a National Health Insurance Exchange with a range of private insurance options as well as a new public plan based on benefits available to members of Congress that will allow individuals to buy affordable health coverage.

The National Health Insurance Exchange will also make health care affordable to small businesses which are increasingly unable to provide health insurance coverage for their employees because of the high costs. To further assist small businesses in providing affordable health insurance, the plan introduces a new Small Business Health Tax Credit. Small businesses will not be fined if they do not provide health benefits. The plan does impose a pay-or-play requirement to large employers, in which they will have to make meaningful contribution to the cost of quality health coverage for their employees. Now, keep in mind that the current tax system encourages companies to offer insurance, and that 61 percent of the nonelderly population in the U.S. had insurance through their jobs in 2006.

The main aim of McCain's plan is to reduce health care costs by increasing competition. He will promote competition by allowing the sale and purchase of insurance across state lines. No federal standards would be imposed and insurance companies would not be required to cover preexisting conditions. Instead, he will increase high-risk pools that exist in many states to cover those who have been denied coverage or have high-cost health issues and offer some financial assistance to low-income people in such pools. He plans a $5,000 refundable tax credit for families and $2,500 for individuals to buy health insurance and if the insurance costs less than the credit, people can deposit the remainder in expanded Health Savings Accounts. People that have employer based healthcare will be taxed on the value of their benefits, so the tax credit will be partially offset.

Initially McCain's plan would result in a net decrease of the uninsured, but experts foresee a net increase of the uninsured within five years. Those who would benefit most from McCain's tax credit are those who already buy their own private plans and don't receive tax benefits. And initially those who are uninsured may find the tax credit provides enough financial incentive to sign up for health care policies. But average annual premium costs for individually purchased plans ranges from $1,163 to $5,090 for singles, and $2,325 to $9,201 for family coverage. This means that already the tax credit proposed by McCain is not be enough to cover health care in most cases. Because the average premiums for employer-sponsored health insurance increase much faster than the health tax credits, we will see a reduction in employer-sponsored coverage. This would increase demand of individually purchased plans, thus increasing health care cost. So, about 61 percent of the nonelderly population in the U.S. will be at risk of losing their insurance and younger workers usually have lower income. These means that most of the people losing their employer health benefits will be in the high-risk government pool. In the end, more people will be uninsured and dependent on the government assistance to afford health care.

By creating minimum federal standards, Obama's plan guarantees that more people will have affordable and accessible health insurance. On the other hand McCain's plan has no intention on regulating the healthcare system. And we have seen the impacts of deregulation on our economy. McCain's plan may offer an immediate decrease in the uninsured, but it eventually makes the disparity of health care availability even worse. And as always the poor and sick behind will be left behind. "A world that is greatly out of balance in matters of health is neither stable nor secure." It is time our government works proactively to balance healthcare availability within its 50 states. We need to feel safe first in our nation and be able to guarantee rights and liberties to our own people if we want to effectively fight for democracy in the rest of the world.

Link to the WHO 2008 report: http://www.who.int/whr/2008/whr08_en.pdf
Link to Obama-Biden Full Healthcare Plan: http://www.barackobama.com/pdf/issues/HealthCareFullPlan.pdf
Link to McCain's Plan: http://www.johnmccain.com/Informing/Issues/19ba2f1c-c03f-4ac2-8cd5-5cf2edb527cf.htm

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