News Release: School of Public Health

Oct. 2,  2008

Emory Health Policy Expert Weighs in on Candidates' Health Care Plans

News Article ImageKenneth E. Thorpe, PhD

The presidential candidates' health care plans share some important elements, but Sen. John McCain's proposed health care plan is likely to result in higher overall health care spending than Sen. Barack Obama's, says Kenneth E. Thorpe, PhD, Emory University health policy researcher.

Thorpe, professor of health policy and management at Emory's Rollins School of Public Health, is the author of two analyses that detail estimated savings from both the McCain and Obama proposed plans.

Under McCain's plan, 14 million adults would face either denials of coverage or pre-existing condition waivers in today's individual health insurance market. If all employers dropped coverage, over 65 million adults would face the same fate, Thorpe's analysis notes.

Several elements of both presidential candidates' health plans are similar: They both emphasize the need to more effectively manage care for chronically ill patients (whose illnesses account for about 75 percent of overall health care spending in the U.S.) and to reduce the rising prevalence of chronic illness through primary prevention initiatives aimed at cutting smoking and obesity rates. Both plans also emphasize the importance of health information technology.

The critical difference is that "Sen. McCain's health care plan would change where and how many Americans secure health insurance," says Thorpe. "It would also change how insurance is bought and paid for. These are significant changes from the current system."

The central tenet of McCain's health care plan is to withdraw the current tax exclusion of employer health insurance contributions and treat them as taxable income. In exchange, McCain would provide refundable tax credits of $2,500 for individuals and $5,000 for families to offset the cost of purchasing insurance in the non-group private market.

Last year, the average annual premium for employer health insurance covering a family of four was just over $12,000; the average annual premium for a single person averaged about $4,500. Of the 160 million Americans who now have employer-sponsored insurance, approximately 25 million would lose coverage under McCain's proposal, and most would seek replacement coverage in the non-group market, says Thorpe.

"The changes in national healthcare spending associated with this change vary widely - from zero net cost increase upward to $37 billion by 2010," says Thorpe.

In addition, McCain proposes that higher-risk, chronically ill patients secure health coverage through state high-risk pools. The plan is not specific on the mechanism for assuring Guaranteed Access Plan (GAP) coverage, and does not address how generous subsidies would need to be. But even if the overall cost of insurance for high-risk populations were capped at 50 percent higher than the current total cost of employer-sponsored insurance, the federal costs of this portion of McCain's health plan would approach $70 billion per year.

In contrast, Obama's health care proposal could reduce national health care spending by $200 billion to $275 billion and federal spending by approximately $100 billion by the year 2012. "Taken together, Obama's coverage and cost proposals attack the core causes of rising health care spending and address the issues surrounding more effective clinical management of patients with multiple chronic health care conditions," says Thorpe.

Obama's health care plan includes a number of components designed to improve the quality of care and make health care more affordable over time. Key initiatives in the Obama plan include broad-scale adoption of health information technology, along with changes in financial incentives for physicians to promote evidence-based, best practice coordinated care management programs. In addition, Obama's plan encourages wider use of lifestyle change and wellness programs designed to reduce obesity and its associated costly conditions, such as diabetes, heart disease and stroke. "About three-quarters of current health care spending in this country is linked to patients with chronic diseases such as high blood pressure and diabetes. To adequately reform our health care system, the next President of the United States must address preventable chronic disease," says Thorpe. Thorpe is the former Deputy Assistant Secretary for Health Policy in the U.S. Department of Health and Human Services under President Clinton. He regularly testifies before the U.S. House and Senate on issues of health care financing, insurance and health care reform, advises state governments on health reform efforts, and is a frequent commentator for print and broadcast media.

Dr. Thorpe's analyses of Sens. McCain and Obama's health care proposals are available at:

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The Robert W. Woodruff Health Sciences Center of Emory University is an academic health science and service center focused on missions of teaching, research, health care and public service.

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