Race For the White House: Coming to new terms in health care
(Omaha World-Herald (NE) Via Acquire Media NewsEdge) Oct. 5--For more than a million Nebraskans, their jobs provide something nearly as important as their paychecks: health insurance.
Nebraska and Iowa have higher percentages of workers insured through jobs than the national average.
But health care proposals from presidential candidates John McCain and Barack Obama could loosen the long-standing tie between employment and insurance.
McCain could gradually shift some people away from job-based coverage through his proposal that would tax employer-sponsored health benefits and offer tax credits for people to purchase insurance on their own.
A gradual shift also could occur under Obama's plan, which would require larger employers to provide health insurance or pay a tax to support a new public insurance program. Some employers might decide it's cheaper to pay the tax than to offer coverage.
Each candidate also addresses the uninsured, with some experts and one independent study saying Obama's plan would provide more people with coverage.
McCain's overarching idea is to provide more insurance choices outside of group coverage, creating more competition among providers. He also wants consumers to be able to carry their insurance with them from job to job.
Ultimately, consumers could face higher deductibles under McCain's plan and increasingly pay for ordinary health care costs out of their own pockets, according to a policy analyst with the Kaiser Family Foundation.
Government controls could make that less likely under Obama's plan, where the overall goal is to build on the existing system and promise coverage through a mix of private and expanded public health insurance.
Health care was a key topic in Thursday's vice presidential debate and likely will resurface in Tuesday's presidential debate, with its town-hall format.
Any changes to employer-sponsored coverage would draw attention from people such as Mike Soltys of Omaha.
Insurance through his employer covers Soltys; his wife, Julie; and their three children, ages 14, 12 and 9. They've tapped insurance for big costs such as childbirth and smaller ones such as vaccinations and doctor visits for fevers and the flu.
"It's a security blanket, knowing that when things happen, you will be taken care of," said Soltys, 43, a pharmaceutical company representative.
Dr. Mark McClellan of the Brookings Institution, a nonprofit public policy organization, said the McCain and Obama proposals share a key element: They recognize that there already is a trend away from coverage through jobs, largely because of the cost to the employer.
He and some other health care analysts say alternatives are needed because workers who lose their jobs or whose employers drop coverage often are left facing an expensive option: coverage through the individual market.
Esmeralda Renteria of Omaha was laid off three month ago, losing the family coverage she had as a community health worker for Douglas County. She and her husband and three children lived without insurance because private coverage was too expensive.
She worried about her children -- ages 11, 10 and 1 -- getting seriously injured or ill. Doctor visits for fevers and a vaccine this summer left her with $300 in bills. Renteria even delayed taking her 10-year-old to the doctor for leg pains and a headache.
But Renteria recently received some relief. The county last week hired the 36-year-old for another position that provides family coverage.
Both presidential candidates would offer alternatives to job-sponsored coverage -- and both have drawbacks, said Jennifer Tolbert, the Kaiser Foundation analyst.
McCain's plan would encourage consumers to purchase individual insurance by ending the income tax breaks on health benefits from employers. Workers currently do not pay income taxes on their health benefits.
McCain also would provide tax credits of $2,500 for an individual and $5,000 for a family. The tax credits would be available to those who already have insurance through their job, to offset the new income tax and to help pay for their premiums. The credits also would be available to those without insurance, so they can purchase a plan through the individual market.
The availability of the tax credits could give some employers another excuse to drop coverage, because workers could use the money to purchase their own, said Dr. Richard O'Brien of the Center for Health Policy and Ethics at Creighton University.
A study by the Tax Policy Center, a nonpartisan organization in Washington, D.C., says the McCain plan would decrease the number of people covered by employer-sponsored health insurance. But there would be a corresponding increase in people covered by plans they purchase on their own, according to the study.
Even so, $5,000 -- the tax credits for a family -- might not be enough to purchase solid coverage on the individual market, said Tolbert, the Kaiser analyst.
In Nebraska, the average annual total premium for employer-based family coverage is about $11,000. That includes the employer and worker share.
A family could find health insurance for $5,000 annually on its own, but it could carry a deductible as high as $3,000, said Jeff Ingraham, president of Omaha Advisors, a health insurance brokerage firm. There would be no co-pays, which means the family would pay all costs out of pocket until the deductible was reached.
For people whose employers continue to offer coverage, the $5,000 tax credit could initially help to offset the income tax on health benefits.
But Tolbert said that advantage likely would diminish over time because any annual increases in the tax credit probably would not keep pace with premium increases.
Under Obama's plan, employers of a certain size that don't offer health insurance would pay a percentage of their payroll into a new public insurance plan. His campaign has not yet specified the size of employer or the percentage.
The new public plan would be available to people without access to other public programs or employer-sponsored coverage.
The idea is to give people more options than just employee-sponsored coverage and existing public programs, such as Medicaid.
Along with a new public plan, private plans would be available to the uninsured and for people looking for an alternative to their job-sponsored plans. Both the public plan and private plans would be purchased through a government-regulated clearinghouse. The clearinghouse would set rules to ensure that private plans are affordable.
There is disagreement on whether Obama's proposal would result in an increase or decrease in the number of people insured through their jobs.
The Tax Policy Center study said it would increase that number, partly because Obama would provide tax credits to small businesses as an incentive to offer coverage.
Some employers might determine that they'd save money by eliminating worker coverage, and instead pay into the new public insurance program, said Joe Antos, a health policy expert with the nonpartisan American Enterprise Institute.
Soltys, the Omaha pharmaceutical representative, said even though coverage through his job is important, it's not perfect.
Premiums increase. Switching jobs or careers is tougher because insurance doesn't travel with you.
Affordable insurance not connected to a job, he said, would provide a key advantage.
It would offer not just peace of mind, but a feature his coverage now lacks: flexibility.
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