John McCain's health plan won't lower the ranks of the uninsured. Barack Obama's fails to curb the soaring cost of health care, meaning initial gains in helping more people buy health insurance would eventually be undermined.
That's the assessment of health care economists who critiqued the plans of the two presidential candidates.
The critiques, published in the journal Health Affairs on Tuesday, reflect fundamental disagreements over how to improve access to health coverage. They also sound warnings about what could go wrong with each candidate's plan.
McCain would dramatically reshape the way millions of people get health insurance. The Republican would do away with income tax breaks for health insurance obtained through the work place, instead treating the payments as taxable wages.
In exchange, he would give people a $2,500 tax credit for individuals who buy health insurance and a $5,000 tax credit for families that do so.
The tax credit could help people buy insurance through their employer. Many would also use it buy coverage directly from insurers in the individual market. They could select from insurers licensed in any state. With more competition, costs would fall and quality would increase, McCain reasons.
Analysts writing in the journal warned against that approach.
They said employers would be less likely to offer coverage if they knew their workers could get it elsewhere. In all, the authors projected that 20 million people would lose their employer-sponsored insurance under McCain's plan, while 21 million people would gain coverage through the individual market — little more than a wash.
And as monthly insurance premiums rise and the tax break stays the same, even that gain would erode.
Another concern is that insurers would gravitate to states with less onerous coverage requirements. For example, 29 states insist insurers in the individual and small group market cover cervical cancer screenings. They could locate in states without such requirements.
Obama wants the government to subsidize the cost of health coverage for millions who otherwise would have trouble affording it on their own.
The Democrat would set up a kind of government-run shopping mall that would negotiate prices and benefits with private insurers. One choice would be a government-run plan. No participating company could turn someone away because of pre-existing cancer, heart disease or diabetes. Nor would someone have to pay a higher monthly premium based on those conditions.
The government would subsidize the cost for many who buy coverage through this exchange. But analysts say using third parties to subsidize the cost of a product exacerbates health inflation. Consumers and providers act as if any service that might yield some value should be covered. After all, it's largely somebody else who is picking up the tab.
"Any major expansion of coverage will be costly, and the Obama promise of affordability would require new, large, and rapidly growing federal subsidies that are unlikely to be sustainable, fiscally or politically," said the authors.
Obama would also require all but small businesses to make a "meaningful" payment for health coverage of their workers or contribute a percentage of payroll toward the cost of the public plan offered through the exchange. The authors said that either way, job losses or pay cuts would result.
The journal subjected the plans to a sort of devil's advocate analysis. Once the unsolicitated review of McCain's plan was reviewed and accepted, the journal sought out economists who would take a similarly tough look at the Obama plan. The reviewers of the Obama plan included Gail Wilensky, an unpaid adviser to the McCain campaign.