How Obama's and McCain's Health Plans Affect You

Dr. Tim Johnson compares the candidates' proposed health-care plans.

Oct. 8, 2008 — -- Just what do Barack Obama's and John McCain's potential health-care plans mean for you and your family?

"Good Morning America" medical editor Dr. Tim Johnson broke down the most important differences between the presidential candidates' health plans. With 62 percent of Americans younger than 65 years old getting their health care from their employers, it's a major issue.

Size the plans up for yourself below, as Dr. Tim explains them and uses real examples to show how they'd work.

The Main Difference

McCain is trying to get more people away from employer-based health care and into individual health-care plans. Obama is trying to get more people into employer-based health care.

Basically McCain would tax your health benefits as he would a salary and offset your purchase of an individual plan with a tax break.

On the other hand, Obama would have the employers make a decision with his pay or play rule. Medium and large companies would have to either provide health-care coverage, or pay a tax that would go toward funding the uninsured.

Helping the Uninsured

Paul Stephens is a 62-year-old from Princeton, Ind., who lost his job and health insurance in 2005. He hasn't been able to find a job and can't afford to pay for insurance, so he stopped going to the doctor.

In Paul's case, both plans would offer individual options in the health-care marketplace.

Under the McCain plan, he'd get a tax credit for buying an individual plan — $2,500 for a single person and $5,000 for a family.

But at this point, it appears you have to go out and search for it yourself. McCain hasn't put out exact details on how he'd regulate or vet individual providers.

He's also offering the option to purchase plans across state lines, which means you could buy a less expensive plan from another state. But at this point, you're on your own to find out if the plan actually gives you what you need.

The average employer-sponsored family policy costs $12,680 per year. Right now, $5,000 on an individual plan might get you the bare bones catastrophic coverage, with extremely high deductibles.

Obama's plan would offer someone like Paul individual plans through a national health-care exchange, which will offer a certain number of pre-vetted plans. It's similar to what federal employees, including both candidates, are on.

The point of the health-care exchange would be to make it easier to choose what's right for you. A lot would depend on what you can afford and neither candidate has clarified what subsidies would be provided.

Obama hasn't given any details yet on how he'd set that up. Administrative costs typically add 30 percent to the price of your plan. You save on those when you get them through your employer. So this health exchange would be designed to save you that money. So far, Obama has said he'd eliminate tax cuts on the wealthy to pay for health care, so all we can presume at this point is that the money would come from there.

Tackling Prescription Drug Costs

Jan Stevens, 58, from Anaheim, Calif., pays $450 a month on average in prescription drug co-pays for eight chronic illnesses — the most serious of which is a chronic bladder disease. She wants to know which plan will go further toward helping pay for those medications.

Typically, employer-based plans do a better job of providing discounts because they can negotiate a better bargain on medical costs, meaning Obama's plan might be more appropriate.

That's not to say some individual plans won't provide excellent drug coverage, but they'll cost you plenty up front.

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