Health Insurance —The Broad Strokes and the Details

Kimberly Tyler Health Guide
  • Both Democratic and Republican presidential candidates agree that there is a problem to be fixed in America regarding accessibility to health insurance coverage. The main strategies for each political party to achieve health insurance access differ on three major points. Interestingly, two major similarities underlie these seemingly disparate approaches. (Actually, there is also a third similarity that will come into play after the election: passing all these policies into law.)


    Understanding the basics between the two political parties' overall approach to this issue is key. It is important to note that the basics presented here for each political party do not apply as an absolute to each candidate; each party candidate has variations to the methods proposed to achieving change.

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    The main differences as I see it are threefold. The first is the concept of whether or not to mandate health insurance coverage (i.e., health insurance would be required by law). The second difference is the concept of whether or not to create a federal health insurance plan that all Americans (or their employers) would pay into. The third is employers must offer health insurance coverage to their employees.


    The two similarities underlying both approaches are to create a competitive marketplace for health insurance companies to sell their services; and, to pass new health insurance transparency laws (i.e., clear and public access to the insurance companies' fine print to show what they cover, do not cover, what the premiums pay for [medical versus administrative costs], quality-driven care incentives, etc., for more informed choices by the consumer).


    The Democratic candidates lean toward mandating health insurance coverage and creating federal health insurance plan options comprised of both public and private companies. Democratic candidates believe that if Americans have to have insurance, this will induce marketplace competition (not entirely unlike car insurance and all the competitive ads we see on TV). Further, by requiring employers to offer health insurance to employees, this increases their participation in the marketplace. Subsidies and/or tax credits would be given to families who could not otherwise afford to pay for insurance premiums. The federal government will maintain/contain insurance company premiums and improve coverage options.


    The Republican candidates do not endorse mandating health insurance coverage or federally-run insurance health plans (other than Medicare, Medicaid and the SCHIP). Rather than pay into a federal system for health insurance options, and then pay for a premium on top of that, Republicans propose substantial tax deductions to individuals and families for their yearly health insurance premiums (running in the area of $2,500 per individual to $5,000 per family). By utilizing this strategy, the idea is to promote marketplace competition by allowing individuals and families to choose their own health insurance rather than only having the option to go through their employer. If Americans get their health insurance premium monies reimbursed, they are free to "shop" for the best service. Competition in insurance costs and benefits would be generated through consumer-driven forces without federal containment measures.


    Not all Democratic candidates support the mandate of the health insurance requirement for all Americans. Some candidates do, but others mandate only for children while others would not so much enforce such laws but "encourage" phase-in over the next several years. And each Democratic candidate has their own strategies for creating a federal insurance policy program and various oversight committees. For federally-funded health insurance, the costs are estimated between $50 billion up to $120 billion per year phased in over several years. The money to pay for such federally-run health care plans will come from consumer pay-ins, premiums, money saving quality care and technology/modernization tax incentives and tax exclusions as well as the monies recovered from not having to pay for the billions lost per year to covering the cost of the uninsured.

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    At this point, no Republican candidate supports mandating health insurance coverage. However, there are some Republican candidates who want to create state-run health insurance consortiums of both public and private companies to help drive competition, and there are other Republican candidates who support higher tax deductions on health insurance premiums and banning current tax breaks (or imposing caps) for employer-paid benefits. Like the Democratic strategy (but without the consumer pay-ins and premiums), revenue monies lost to the tax deductions would be recaptured through the same methods as mentioned above.


    Both parties agree that the promotion of personal accountability for health (smoking cessation programs, physical fitness, and disease prevention) will also bring down the numbers of future chronic illness patients and health dollars consumed. By incorporating health insurance transparency laws, Americans would have accurate knowledge of what their health insurance dollars are actually paying for; holding health insurance companies accountable for their spending and what goes to profit versus quality medical care will greatly influence what policies get purchased.


    The bottom line questions then for each of us to consider are how do we envision the future given the options of policy before us? What do we each believe are the best tactical measures to accomplish accessibility to health insurance? At this point, there are still some unanswered questions in the details of each of the candidates' proposals.


    On the Democratic side, for example: Can mandated health insurance coverage be enforced? How much proportionate income is each person expected to pay into the federally-funded health insurance plan and what are the actual estimated costs projected for premiums? Will the costs to manage such federally-funded and mandated programs be recovered as the country enters a period of recession? Where is the dividing line for low income?


    On the Republican side: Will the tax deductions for health care premiums actually cover the full costs of the premiums? If Americans are "reimbursed" the year after spending money for their health insurance premiums, what about those Americans who can't afford it ahead of the initial tax deduction? What about Americans who choose not to obtain coverage--would there still be programs in place for the uninsured, particularly as the reimbursement comes on the back end?


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    For both parties: Has any candidate engaged the insurance companies on their agendas? What happens when the insurance companies begin to lobby the hill in January 2009? And lastly, how do they foresee the impact of their agendas on the ever-decreasing middle class?


    It is not enough for me to declare that I am in favor of health insurance accessibility for all Americans; understanding how each candidate proposes to achieve this end is essential as I cast my ballot in the primaries.

Published On: January 21, 2008