Getting to Universal Coverage

Both plans, she emphasizes, fall short of creating a mandate that people carry some form of coverage. "The only way to get to universal coverage is to have an individual mandate, together with subsidies to assure affordability and mechanisms to assure insurance availability," says Danzon. "The idea that you can get there by offering carrots, like tax credits, or the stick of pay or play, is going to leave some people falling through the cracks and [will] be inefficient."

Arnold Rosoff, Wharton professor of health care management, points to major administrative and mechanical questions about how McCain's tax credit would work. "The devil is in the details," he says, questioning, for example, McCain's plan to allow people to buy health care across state lines. States currently regulate coverage levels and other aspects of health insurance, such as treatment of pre-existing conditions. As a result, premiums vary widely. In states with fewer mandates and less regulation, insurers can charge lower premiums. Under McCain's plan, healthier people could buy cheaper plans in low-cost states. As a result, residents in higher-cost states needing more health care services would face higher premiums than if all residents of the state were in the same pool, and the healthier insurance buyers implicitly subsidized those needing more coverage.

McCain's idea may appeal to his less-government political base, but it erodes the essence of social insurance by allowing people to select their own risk pool, Rosoff argues. "I think we should be moving toward a regime with more social insurance, not less," he says. "But as the economy continues to decline, the 'haves' will want to be unsaddled and not carry the 'have nots' as much. That increasing segmentation of the insurance market is one of the things McCain's plan will enable."

Obama does not push the goal of universal coverage to the extent that his rival for the Democratic nomination, Hillary Clinton, did, says Rosoff, probably because he fears the inevitable financial and potential political costs it would entail. Obama accepts the current private-sector health insurance structure with some tighter regulation which Rosoff described as "band-aid fixes" -- necessary but not sufficient to create the health care system "this nation should have."

Rosoff points out that during the last major run at health care reform, in the early 1990s, corporate America was unwilling to cede management of the system to the government, and was hopeful that managed care, which was just starting to take off, would contain costs. Now, he says, many companies are willing to make health care the government's responsibility. Executives may not be certain that government will do a better job, but if it doesn't, at least they won't have to shoulder the blame.

"For the past 15 years, corporations have been beaten up by costs and dissatisfaction by employees," he says. "They might be really happy to have the government take it over."