USA Today Examines Individual Health Insurance Market, Presidential Candidates’ Proposals

Almost 18 million U.S. residents have individual health insurance, which "works well for some but ... is fraught with costly complexities for many others," and the two major presidential candidates seek to "improve options for those who buy their own coverage," USA Today reports.

"Fixing the problems in the individual market could go a long way toward expanding health coverage in America," USA Today reports. According to USA Today, experts cite three major issues with the individual health insurance market: the inability to obtain coverage for many applicants with pre-existing medical conditions, the cost of coverage and the ability of health insurers in many states to cancel coverage "after patients rack up large medical bills if insurers find out the applicant purposefully -- or, in some states, even accidentally -- left out medical details in the applications."

Presumptive Democratic presidential nominee Sen. Barack Obama (Ill.) has proposed to allow individuals to purchase individual health insurance in groups. The proposal would allow "individuals and small firms to get all the benefits of the purchasing power of big firms," according to Obama health care adviser David Cutler. In addition, Obama has proposed to mandate that health insurers cannot deny applicants because of pre-existing medical conditions.

Meanwhile, presumptive Republican presidential nominee Sen. John McCain (Ariz.) has proposed to replace an income tax break for employees who receive health insurance from employers with a refundable tax credit of as much as $2,500 for individuals and $5,000 for families for the purchase of private health insurance, including nongroup coverage. According to McCain, the proposal would make equal employees who receive health insurance from employers and those who purchase individual coverage. "Yet even as McCain's advisers advocate expanding the individual market, they acknowledge the current system is broken," according to USA Today.

USA Today also examines state and federal efforts to improve the individual market (Appleby, USA Today, 7/17).

San Francisco Chronicle Looks at Medicare Financing
The first of the 78 million U.S. residents born between 1946 and 1964 in three years will begin to qualify for Medicare, whose "finances are commonly described as out of control," and the two major presidential candidates have not announced proposals to address the issue, the San Francisco Chronicle reports.

According to the Chronicle, although both Obama and McCain "promise to spend hundreds of billions of dollars on new tax cuts and spending programs," neither "have ... addressed what the aging of the baby boom generation means" for Medicare, which has long-term liabilities of $34.1 trillion, and other entitlement programs. Their health care proposals "concentrate more on expanding access than controlling the soaring costs that are driving the federal budget problems and squeezing workers and businesses," the Chronicle reports.

John Shoven, director of the Stanford Institute for Economic Policy Research, said, "Health care costs are just amazing," adding, "Social Security is a big problem, but it's dwarfed by health care. Even the housing problem is dwarfed by health care." He added that U.S. health care spending accounts for about 16% of the economy and is "headed quickly toward 30%."

Richard Jackson, director of the Global Aging Initiative at the Center for Strategic and International Studies, said that increased spending on Medicare and Social Security will account for one-fourth of payrolls over the next generation. Experts said that "some form of rationing is necessary" to contain health care spending, according to the Chronicle (Lochhead, San Francisco Chronicle, 7/17).