Vast differences in plans to revive America's ailing healthcare system

Thu, Oct 30, 2008, 00:00

Big changes loom for medical insurance in the US, whoever wins the presidential election, writes Denis Staunton, Washington Correspondent

SCOTT MOORE is 44, overweight and borderline diabetic, but he hasn't been to a doctor for more than a year and he doesn't plan to have a medical check-up any time soon. Moore lost his employer-based health insurance three years ago when he was laid off as an account manager for an Alabama engineering firm.

For 18 months after that, he remained insured through a government-sponsored scheme for those who lose their jobs, but he is no longer eligible for that coverage and his current employer doesn't offer health insurance.

"I signed up for an insurance plan on the internet but it turned out to be a scam," he says.

"The best offers I've seen cost about $400 a month but I've got mortgage payments and a car loan and I don't have that money."

As one of more than 47 million Americans without health insurance, Moore is hoping that the next president will make reforming healthcare a priority but he remains undecided about how to vote. "They're both promising to make it affordable but I don't know if I can believe them," he says.

The US spends more than 16 per cent of its GDP on healthcare, far more than any European country, but few are happy with the system, even if they have insurance. Insurers routinely refuse to cover people with pre-existing medical conditions or charge huge premiums to those it views as risky. Most policies require patients to pay a significant part of the cost of treatment and prescriptions themselves, and insurers often refuse to pay for expensive treatments, even if a doctor says they are necessary.

Chris Jennings, a former healthcare adviser to former president Bill Clinton, says that everyone in the healthcare industry believes the next president should make healthcare coverage universal.

"The reason why the coverage issue is so important is that it maximises our ability to be efficient in the delivery of healthcare," he says. "It's not an altruistic act, it's an economic one."

Barack Obama hopes to extend health coverage by setting up a new federal health plan for the uninsured, providing benefits comparable to those offered to federal employees and subsidising premiums for low earners. Parents would be obliged by law to insure their children's health, and employers would have to either provide health insurance or pay an extra tax to subsidise the federal plan.

Insurance companies would be banned from discriminating against people with pre-existing conditions or refusing coverage based on age, but, unlike his former Democratic rival, Hillary Clinton, Obama would not require individuals to take out health insurance.

"The Obama plan doesn't reach universality," says Chip Kahn, president of the Federation of American Hospitals. "It's not as good as Hillary's. She got there but she didn't win."

Hospitals want universal health coverage because they bear the cost of treating the uninsured who cannot be turned away when they show up at accident and emergency rooms with acute symptoms.

Jennings agrees that, without a legally-enforced mandate requiring individuals to take out health insurance, Obama will be unable to ensure that everyone is covered. "If you use the word mandate or jail sentences or anything like that, people flip out," he says.

"But here's the reality - you can't get everyone into the system without some kind of mandate."

John McCain favours a market-based approach to reforming healthcare, offering a $5,000 annual refundable tax credit to help employees pay for private insurance plans. He would, however, tax employer-based healthcare benefits and would allow insurers to offer healthcare to anyone, regardless of which state they live in.

McCain argues that allowing people to purchase health insurance across state lines would increase competition and lower prices, and he promises to reduce costs by limiting medical malpractice damages and encouraging the faster introduction of generic drugs.

Former Clinton chief of staff John Podesta, who now heads the think tank American Progress, predicts that McCain's plan would prompt insurance companies to move to the states with the lightest regulation. "You're essentially wiping out state regulation," he says.

"I think his plan doesn't add up. I think it would leave the sickest and most vulnerable people with pre-existing conditions out in the cold."

Jennings believes that, regardless of who becomes president, next year will see an attempt at healthcare reform, not least because voters are demanding action from legislators. "Ninety per cent of the voting public has healthcare today," he says.

"They'll be for covering everybody because they're worried about losing it. They're also paying for those people who don't have it. The cost-shifting is coming back to them in terms of higher premiums."