Jason Schifrin, on the always-excellent Healthcare Economist blog, has a solid roundup of various health reform plans of the major Democratic candidates now running for their nomination.

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So
you’re a Democrat and you don’t know who to vote for. Which of the
Democratic candidates has the best plan for health care reform? This is
what I will discuss today.

Similarities

All of the Democratic candidates support the following actions:

• Expanding SCHIP/Medicaid to cover more of America’s uninsured.
• Providing more subsidies for households who can not afford health care.
• Providing a minimum standardized insurance benefit package.
  For instance, both the Clinton and Obama websites claim that insurance
  benefit packages will be similar to those offered through the Federal
  Employees Health Benefits Program (FEHBP). This is the plan members of
  Congress have.
• None of the candidates has proposed to end the tax deductible status of employer-provided health insurance.
• All support guaranteed issue (i.e.: The right to
  purchase insurance without physical examination; the present and past
  physical condition of the applicant are not considered.).
• Although none of the candidates’ websites explicitly state this, all must raise taxes to finance these expanding benefits.
• All three will offer employers the choice of providing health
  insurance for employees or contributing a percentage of their payroll
  towards the costs of the national plan.

Differences

A chart may be helpful here:

	Obama	Edwards	Clinton
Insurance mandate?	N	Y	Y
Expand SCHIP?	Y	Y	Y
Guaranteed issue?	Y	Y	Y
Community Rating?	?	Y	?
Insurance subsidies?	Y	Y	Y
End tax deductibility of employer-provided ins?	N	N	Y
Begin tax deductibility of individual ins?	N	N	N
Regional Purchasing	N	Y	N
Allow drug imports?	Y	?	?
Expand HSA?	N	N	N

• Clinton and Edwards both support insurance mandates. Obama is trying to expand coverage to more and more people but is not mandating coverage.
• Edwards proposes the creation of a regional purchasing system which
  he names “Health Care Markets.” This system will be available for all
  individuals who do not have employer provided insurance. According to
  the Edwards website “non-profit purchasing pools that offer a choice of
  competing insurance plans. At least one plan would be a public program
  based upon Medicare.” The Obama and Clinton plans aim for more
  government regulation as well as the offering of public health
  insurance to individuals, but do not involve regional purchasing.
• Obama states that he would allow the importation of pharmaceuticals
  from developed nations. I have not seen where the other two candidates
  stand on this issue.

Healthcare Economist’s Take

Electing a Democratic president will likely move us closer towards a
universal health system. Subsidizing health care will help poor
individuals afford the care they need. I like the egalitarian approach
of Democrats but this type of system will be expensive.

Many of the candidates propose that the federal government will
reimburse employer health plans for a portion of the catastrophic costs
they incur above a threshold. This may decrease insurance companies
incentive to provide inexpensive preventive care. For instance,
insurance companies have a large incentive to provide beta blockers to
reduce heart attacks, but if the federal government will pay for most
hospitalizations, than the incentive to provide this care diminishes.

While there is no one optimal standard for insurance
benefits, standardizing insurance benefits can help eliminate some of
the patient-third payer confusion of what will actually be reimbursed.
It will also help stop the insurance company practice of denying claims
to increase profits.

The one drawback to this system is that it is expensive. Taxes will
have to be raised. Although the candidates talk generally about
preventive care and EMR, without having individuals bear a significant
share of the marginal costs of medical care, medical spending will like
increase significantly.

The Healthcare Economist Democratic Pick: OBAMA

If you are a Democrat and are voting solely based on a health care
reform agenda, I endorse Obama. Obama does not mandate insurance
coverage. Instead, he is trying to make care more affordable without
telling individuals how to spend their money. Further, I
whole-heartedly agree that patients should be able to buy prescription
drugs from developed countries. Obama’s goal is to expand coverage
which still allowing significant choice. The Edwards plan is one step
away from nationalized health care.

Obama also has an explicit proposal to create and fund an
“independent institute to guide re­views and research on comparative
effectiveness.” Although the government may not be the best mechanism
for this, disseminating medical ‘best practice’ methods is vital to
improving medical quality.

The Obama plan will be expensive and either taxes will have to be
increased, or spending must be cut elsewhere. Still, Obama is the best
Democratic option.

Candidates’ Statement on the Health Care Issue

• Clinton
• Edwards
• Obama

Topics: Federal Reform |

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