McCain Vs. Obama on Health Care: A Working Mom Compares

I am a working mom and currently the sole breadwinner in my household. While the cost of having health insurance is difficult to pay, I don't dare go without it because the expense of a major accident or illness would destroy me financially. As a result, the healthcare debate has my undivided attention. Both John McCain and Barak Obama claim that their healthcare plans would save me money and make healthcare more accessible. They both cannot be right so I took a closer look at both plans using my own finances as a point of comparison.

I earn $37,100 per year and have an employer sponsored health plan. I have one child who is currently covered under my plan. My employer values my plan at $7900 and I pay $2100 of that. My healthcare plan provides vision and dental coverage. Both my income and healthcare coverage are below the national averages of $50,233 and $12,000 respectively.

The Obama plan claims that, should I choose to remain in my employer plan, nothing would change for me. I read through his plan as published on his website and I cannot find where my costs would increase nor would my benefits be reduced. I work for a large corporation that provides health insurance so my company would be exempt from any of the fees or fines proposed under the Obama plan. I cannot find any incentive for my company to change anything.

The Obama plan does increase government involvement in health care which some may find problematic. He will require large employers that do not currently provide health care coverage to pay into a fund that will be used to cover the costs of uninsured employees. Obama also suggests the creation of a new public insurance plan whose focus would be to give the uninsured and others more health care options. Both of these options will likely require the creation of a new government bureau, or the expansion of powers of an existing entity, to oversee these programs.

The Obama plan would be funded by allowing the Bush Administration tax cuts to expire. Many are concerned about this but I cannot afford to be. While I hope to one day belong to the ranks of those earning $250,000 or more, that is not my condition now nor do I see this changing greatly in the near future. I cannot pay today's bills with tomorrow's dollars.

The Healthcare plan developed by John McCain on the surface seems acceptable. Like the Obama plan, he promises that my current health care plan does not have to change. He also says that his plan will ensure that people with pre-existing conditions will not be left out. He will see to that through the creation of the Guaranteed Access Plan. The oversight of this program will also likely require the expansion or creation of a government entity.

The McCain plan would give me a tax credit of $5000, paid directly to my insurance company, to cover some of my healthcare costs. I could also use that $5000 to find another health plan should I choose. However, when I sit down with the numbers, his plan starts to get fuzzy and I cannot find the answers to my questions on the McCain website since there are few specific details currently available.

Using my numbers, if I stay with my current insurer, the McCain credit should give me a $2900 surplus to put towards a Health Savings Account ($5000 credit minus $2100 personal contribution equals a $2900 surplus). The HSA is a savings account similar to an IRA whose funds are to be used specifically for medical purposes. Unlike employer Flexible Spending Plans, which are "use it or lose it", the HSA does not expire. The catch is in order to qualify for the HSA you must be enrolled in a High Deductible Health Plan or HDHP.

The deductible for an HDHP must equal or exceed $1100 for the individual or $2200 for a family. My deductible is currently $250. Funds in the HSA cannot be applied to premiums so I would have to pay out over two thousand dollars before the HSA kicks in. Since I could not afford to raise my deductible to $2200, what would happen to the $2900?

My next concern is how McCain plans to fund his new program. According to his website, he would tax my employer plan as income. That would represent a tax increase of $1300 to me ($7900 employer value multiplied by 17.5%). So now not only have I lost access to $2900, I also have an income tax increase of $1300.

I could, under the McCain plan, take the $5000 credit and shop around the various insurance plans throughout the nation, hoping to find something equivalent to what I have now. Googling "health insurance" returned 24,800,000 hits. Shopping for health insurance would become a full-time job. When I think of this option I cannot help but be reminded of the chaos that seniors had to endure when the new prescription plan went into place.

There were hundreds of mind boggling options to sort through, and although senior organizations and pharmacies across the country employed huge staffs to assist with the transition, and drug companies spent millions of dollars in advertising to promote their programs, many seniors found themselves scrambling when they discovered that one medicine or other was not covered under the plan they chose.

According to the U.S. Census Bureau, 59.3% of Americans, or 177.4 million people are covered under employer sponsored health plans. No matter how he spins it, the McCain plan represents a tax increase for a majority of Americans. Some will see that offset by his credit but many will not.

So a side-by-side look at the two plans from my financial perspective leads me to choose the Obama plan. His plan presents the least impact to my finances both up front and in the long term. Many will argue that the way Obama intends to fund his healthcare plan is unfair to those earning over a quarter of a million dollars per year but the Bush tax cuts would have to be allowed to expire for the sake of the economy anyway and that money is better spent on health care for all Americans rather than on earmarks for a few.