Where McCain's Change Is Bigger Than Obama's

As Sens. John McCain and Barack Obama both plan to engage each other on the economy this week [1], this presents an opportunity for reporters and voters to focus on one of the biggest contrasts between them: health care. As Paul Krugman observes today, [2] "[health insurnace] premiums surged again after 2000, imposing huge new burdens on business. It’s a good bet that this played an important role in weak job creation." Fixing our patchwork health insurance system would go a long way to getting our economy back on track.

In most areas of the campaign, Obama offers a change from the policies of the past eight years, and McCain offers a continuation.

But on health care, both offer change. In fact, McCain will change health care for more people than Obama.

All those people potentially affected will have determine if they want the kind of change McCain is offering.

How would McCain's plan change health care for more people? Because he wants to strip the underpinning of how the vast majority of people get their health insurance, through their employers. [3] (Just under 60% of Americans get insurance from employers, down from when President Bush entered office [3] as fewer businesses offered coverage [4] and the number of uninsured Americans rose.)

Presently, you don't pay income taxes on the health benefits you get from your employer. McCain would end that policy [5], which would not only impose a new tax mainly on middle-class families [6], but also end a strong incentive for employers to offer health benefits at all [7], and move us all towards a "consumer-driven" health market.

There are arguments elsewhere on our site criticizing [8] such a plan.

But putting aside the merits of the plan for the moment, it is politically relevant that McCain's strategy directly impacts the vast majority of people who have health insurance -- many of whom are content with what they have, even though the number of uninsured and underinsured Americans is rising.

In contrast, Obama's plan would create a public insurance option and set new standards for private insurance options so they will be, in his words, "at least as generous as the new public plan and meet the same standards for quality and efficiency." But anyone happy with their health insurance could simply keep it and would find their plan untouched.

Obama's change is more targeted, aiming to help the uninsured and underinsured without unnerving the happily insured.

McCain's change is total, a frontal attack on the entire system as it stands, trying to convince all Americans that they will be happier if most everyone is moved into a new market where you buy insurance out of pocket.

Because Obama's plan involves an active role for our government -- both in creating a public insurance option and serving as a "watchdog" on private plans -- most Beltway pundits would argue that Obama is taking the bigger political risk.

But nearly two-thirds of Americans believe "the federal government should guarantee health insurance for all Americans.” [9]

There's hasn't been much polling about the specifics of McCain's plan. But as a general rule, the notion of losing something you currently like is always a troubling prospect.

It will take a particularly powerful argument from McCain to overcome that political hurdle, and convince those voters that his brand of health care change is the right change for them.