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October 17th, 2008
01:12 PM ET

Checking the candidates' health insurance claims

By Dr. Sanjay Gupta
CNN Chief Medical Correspondent

As the presidential election draws near, one issue people have been talking about a lot is health care. The candidates talked about it for a good chunk of the recent debate, and most people are pretty interested in what it all means. The problem is, hardly anyone understands it. I wanted to use this blog to share some of what we uncovered.

First of all, Senators McCain and Obama throw out wildly different numbers. McCain says the average cost of health insurance in this country is around $5,800 for the average family, while Obama cites the figure as closer to $12,000 (listen to the candidates in their own words).

Well, according to AHIP (America’s Health Insurance Plans), the results of a study about health care costs put the national average cost of a family health care plan at $5,799. That seems to be the number McCain is using. There are a couple important caveats. Your cost of health care is very dependent on where you live. For example, the cost of a family plan in Massachusetts is over $16,000. In Wisconsin, the cost is closer to $3,000 (read study results).  McCain does say that under his plan, consumers will be able to buy health care from different programs so, even if you live in Massachusetts, you would be able to buy a Wisconsin plan. The other caveat is health care costs are incredibly dependent on something known as pre-existing conditions. If you have an already diagnosed illness, it can make getting health care much more expensive, if not impossible.

According to our digging, Obama’s number of $12,000 seems to come from a Kaiser Family foundation survey (read survey). That survey looked specifically at the cost of employer-based coverage, not individual family plans. The reason the number is so much higher is because employers “pool” their employees together. People who have existing conditions are pooled with those who are healthy, and that drives up health care premiums overall.

In a way, they are both right – but they are talking about very different things. In case you are curious, as things stand now – 62 percent of people have employer based coverage, 15 percent are insured through the government, 5 percent have individual plans and 18 percent are uninsured.

Obama wants to create a plan that allows all consumers to have access to the same sort of plans he has as a U.S. senator. With so many people joining such a national plan, the Obama campaign is banking on health care costs coming down overall. He also wants to mandate that every child have health care insurance.

With McCain’s plan, there is a $5,000 tax credit for families, which would cover all but $800 of the average health care plan. And, they tell us if you currently have employer-based coverage, you could still use the credit to pay for the taxes you begin paying on your health care benefit or to offset co-pays and out-of-network costs.

Have you considered all this and if so, which plan do you like more? Why?

Editor's Note: Medical news is a popular but sensitive subject rooted in science. We receive many comments on this blog each day; not all are posted. Our hope is that much will be learned from the sharing of useful information and personal experiences based on the medical and health topics of the blog. We encourage you to focus your comments on those medical and health topics and we appreciate your input. Thank you for your participation.


soundoff (33 Responses)
  1. BA JOHNSON

    I was disappointed by the CNN story on the canidates health insurance plans. The fact is, a worker with health benefits provided by their employer will see a tax increase under the McCain plan. I was hoping that point would be made. I know this to be fact, because I have "ran the numbers" in my own case.

    October 17, 2008 at 13:48 | Report abuse | Reply
  2. Aric

    Sanjay,

    I love your work and as a health care professional, follow your stories closer than others. I wanted to add to your comment about employer-based plans and the reason they cost more though. Yes, it is partly because those with good health and not so good health are pooled, but from what I understand, the majority of the reason for the increase in cost is because employer plans cover pregnancy (as well as some other misc things that individual plans may not cover, like Chiropractic, mental health, etc). Pregnancy seems to be the real driving factor in that increase. Keep up your good work!

    October 17, 2008 at 13:56 | Report abuse | Reply
  3. pattyt

    It is so misleading to even to begin to imply that an average family of 4 can have quality health insurance for $5800 per year. Anyone that has shopped for family insurance knows that when policies are at that price range the deductible is high, the percentage that the policy pays after the deductible is met is not at the 80 – 85% range, the lifetime cap on total benefits that will be paid (not to each individual but overall) is not the same as the higher priced policies.

    I would like for this topic to be explored more fully on CNN. In my opinion, so far, the explanations have been too superficial. Show me, for example, how much it would still cost a family if they had a child that was sick on an ongoing basis with a condition or disease. It is misleading to imply to a family that any type of quality policy is available for that price.

    October 17, 2008 at 14:02 | Report abuse | Reply
  4. Peggie

    Barack Obama's health plan is the best choice. Our health and well being is of the utmost importance. Having access to affordable preventivative health programs and medical care will result in less stress and hardhip in the family, in the community and country.

    Even with good coverage within the UC system, my shared costs of yearly exams are prohibitative.

    As a single working worman, the financial devastation due to illness is the number one worry I have. Staying healthy is my priority. Our government, as we support it, should support our efforts to stay healthy both physically and fiscally. They've made it virtually impossible in both areas.

    October 17, 2008 at 14:18 | Report abuse | Reply
  5. Rosemary Robinson

    I can't understand where these low average health insurance premiums you quote are coming from. We are a family of three with no pre-existing conditions and our total annual premiums (no employer sponsored health insurance) are $8,000. That's with my husband having Medicare, with a Part B and supplemental policy, and the other two family members, one of whom is only 19, having a $2,500 per person annual deductible, in Florida. And we thought our insurance costs were about the lowest we could get in our area and with our situation!

    October 17, 2008 at 14:49 | Report abuse | Reply
  6. Jen

    I am a little confused about McCain's plan. I have employer-based health insurance and pay $2366 per year for premiums. Will I get taxed on that? How does the $5000 tax credit factor in? If you assume I am in the 28% tax bracket, that would be an additional $662 I will pay in taxes. If you subtract that from the $5000 tax credit, I would have $4338 left over for a health savings account. Is that right? It sounds like a good deal, but what's the catch?

    October 17, 2008 at 16:06 | Report abuse | Reply
  7. Doug Kauffman

    John McCain's plan is better for the people as a whole because Obama wants to cut the $15 billion dollars of subsidy that is subsidizing senior citizens, if that 15 billion is cut, the difference will be made up by the beneficiaries (seniors).

    October 17, 2008 at 16:21 | Report abuse | Reply
  8. michael

    I have a question:

    Does the average cost for a health plan at 5,800.00 take into account the deductible? Should the cost not be calculated by adding the monthly payments + deductible? People will be out of pocket much more than a mere 800.00.

    My understanding is that depending on the monthly payments, deductibles can run from 500 dollars to 10,000.00. The lower the monthly payment; the higher the deductible. Also if you have a pre-exisiting condition, how much higher are the monthly rates and deductibles? Is the McCain 5,000 used towards the deductible as it goes straight to the insurance company?

    October 17, 2008 at 16:51 | Report abuse | Reply
  9. Sara

    I recently had to leave my job for health reasons and after paying $500 a month (that's $6,000 a year) for COBRA, I had to look for insurance on my own. We are currently paying $230 a month for hubby (that's $2,760 a year) and $500 a month for me. We got separate policies in order to keep the cost down. I have a pre-existing condition and this is the only plan I could get. We both have a very high deductible plan so I consider that to also be a part of our cost.

    I guess some would say my cost is just $8,760 a year but so far this year I have paid over $2,000 in deductibles – and this does not cover my medications since I am "lucky" enough to qualify for assistance on those.

    I don't see how McCain's plan would help anyone who has to pay out of their own pocket especially if they have pre-existing conditions.

    October 17, 2008 at 19:00 | Report abuse | Reply
  10. frustrated

    I work for a health insurance co. The only way John McCain's plan will work is to socialize health insurance. Each state now has different mandates on what has to be covered and at what percentage. Each state has different rules on what an insurance can cap – Insurance co's in Ga. can set a monetary cap on durable medical equipment for instance. Not so in other states.

    Federal HIPAA law actually addresses portability-that is- pre-exisiting conditions- and what a health insurance must do in accepting them.
    The problem comes in when people don't HAVE insurance then try to buy insurance with pre-exisiting conditions. That's when they can be denied. If you are working and have group coverage and switch jobs as long as you stay covered with less than a 63 day lag in coverage the new jobs insurance must cover you with no waiting period. Thats why getting COBRA if its a 3 month waiting period is so important- if you have pre-exisiting conditions.
    Go to any large insurer and go onto their websites. See if you can get a quote for individual health insurance for an HMO/PPO product. In NYC an individual HMO product runs close to $900 a month for 1 reputable insurance co. A PPO substantially more. Outside of NYC it's less but over $600./month for an HMO The PPO is of course more..
    $5000 won't cover the entire premium, never mind the deductibles, co-pays, and co-insurances. And if it does cover- you probably won't want the insurance!
    Your coverage is only as good as the company you work for and the health insurance companies THEY choose. Your HR selects the plans you choose from and the options you get. Is the health insurance company denial happy? Does it have a good drug formulary? What do you GET for the plan you buy? rehab? vision?PT? etc. Don't think you won;t need it. You are 1 car accident away or one cancer diagnosis away from needing really good insurance from a really good company. DO YOUR HOMEWORK!
    $5000. sounds like a lot of money, trust me-it's not.

    October 17, 2008 at 20:13 | Report abuse | Reply
  11. Alison Lex MD

    Having practiced medicine (Internal Med) for the past 10 years, 8 of which were active duty military, there is no doubt in my mind that Sen Obama's plan is more credible to the viability of our nation's health. Unfortunately, Sen McCain is incorrect when he attests that every parent's first priority is to provide health insurance for their children. I have seen first hand the true priorities that many well to-do parents have for their family budget and a health insurance policy doesn't look as good in the driveway as a sporty new car. Mandatory participation is needed to insure that those who cannot make decisions for themselves, either minor children or adult disabled, have health insurance coverage in the event of illness or trauma. Our society has grown beyond the bounds of division; we can no longer view socialism as the defeat of democracy.

    October 17, 2008 at 21:27 | Report abuse | Reply
  12. grace

    The answer to Jen's question above is that while she is paying $2366 for her share of her employer-based health plan, her employer is probably paying $10,000 on her behalf. That is what company health benefits are. Under McCain's plan, the total health benefit will be taxed. However, he has said that that will not include payroll tax, which means Social Security and Medicare, but just income tax. What effect this might also have on state and local taxes, I don't know.

    So with McCain's plan she will get a $5000 tax credit and pay an additional $3500 in federal income tax, leaving a net $1500 tax benefit. Obama has said he is going to work to reduce the cost of employer-based plans by up to $2500.

    By the way, the way to find out how much your employer-based plan actually costs is to look up how much the COBRA payments are at your company human resources site. Mine for instance is $20,000 per year for the family plan. And no it does not cover hair implants nor cosmetic surgery as McCain tried to suggest.

    October 18, 2008 at 02:21 | Report abuse | Reply
  13. Claire

    McCain's statistic applies specifically to the individual health insurance market. Obama's statistic applies specifically to the employer-based health insurance market.

    As this blog post points out, the individually insured comprise the smallest (and healthiest) segment of the population at 5%, and the employer-based insured comprise the largest segment of the population at 62%. So, which statistic do you think is most relevant?

    I'm starting to see the similarities in the philosophy between health care policy and tax policy.

    Also, I would like to point out that the main factor causing the difference in cost between individual family plans and employer-based family plans is actually out-of-pocket costs rather than guaranteed access as was suggested by this blog post.

    Out-of-pocket costs is the sum of the deductible and out-of-pocket maximum. Take a few minutes to browse a variety of individual and employer-based plans, and you'll see that the out-of-pocket cost difference pretty much explains the $7000 difference in premium price, if not even more since individual plans have about a 15% extra in overhead administrative costs compared to employer-based plans.

    October 18, 2008 at 06:49 | Report abuse | Reply
  14. Jack

    How could a Wisconsin health insurance provider cover a family in Massachusetts, a much more expensive market, for the same price as a family in Wisconsin? I wish someone would "run the numbers" explaining how McCain's "crossing state lines" proposal would work.

    I think Obama's plan is more honest and realistic.

    October 18, 2008 at 11:00 | Report abuse | Reply
  15. Cathy

    I like Obama's plan better. McCain's plan would cause many people to lose their employer based coverage, since the employer would opt to stop offering it. I am retired and my previous employer could opt to discontinue medical benefits for retirees at anytime. I have pre-existing conditions that would kepp me from getting individual coverage. Jon McCain's $5,000 wouldn't help at all. Think about it!!!!!

    October 18, 2008 at 20:37 | Report abuse | Reply
  16. Harriet Lyons

    When will the U.S. get sense and catch up to the rest of the developed world? I've lived in Canada for 30 years and have a lot more praise for the government run health care system than the U.S. system I lived under before and that my relatives still live under. Yes, I've sometimes had to wait in the emergency room, and wait for elective treatment, but whenever something was urgent I've gotten excellent care promptly, without worrying about costs. I know people here on welfare or with very low paid jobs, and they get excellent, respectful care here too. On the other hand, I have had relatives and friends in the U.S. who have had to leave work because of cancer and other serious illness and have then lost their policies and had to pay a fortune for individual schemes or COBRAS - in other words, they've lost their health insurance because they got sick. I have one friend who was working two weeks before she died because if she quit she'd lose her insurance! I like Obama's scheme better than McCain's but both leave insurance companies whose main concern is profit handling the lion's share of the coverage. It's time America stopped being so afraid of the S-word. Even under Margaret Thatcher Britain didn't scrap the National Health Service. Here in Canada the average life expectancy in the poorest postal code is longer than the overall average in the U.S. Universal, single-payer health care is part of that difference.

    October 18, 2008 at 20:55 | Report abuse | Reply
  17. Pam

    I pay medical claims for a living. There can be a vast difference in coverage between group and individual plans. Individual polices can exclude coverage for pregnancy, M&N, Subs Abuse. Yes, the cost is lower but the coverage is less than desirable. Like other things in life, you get what you pay for. Under some plans, an office visit for situational depression is an out of pocket expense. This is not good in today's world. You have to pay to get help for your other problems that make you depressed!

    I support Obama's plan. My husband is a retired Autoworker. His insurance coverage cost a minimal amount at this time. If the benefits are made taxable, this will definitely affect out net income. His check will not increase, but his "income" will. We will just end up being taxed on a higher amount if they would elect to list his benefits package as income. I do not carry my insurance coverage(and I pay health claims) as the premiums are more than the annual out of pocket under my husband's plan at this time. I have a flex plan (that is pre-tax for now) that covers the deductibles, co-pays and non-covered items.

    If McCain comes to pass, my home is in serious trouble.

    October 19, 2008 at 09:17 | Report abuse | Reply
  18. PMC of Syracuse, NY

    What appears to be missing in our discussions of health care is an overall perspective of actual cost to both the nation as a whole, to our overall economy, as a reflection of our values, and finally how it effects the individual. Our country lags behind many western countries because of both the expense and poor quality of our health care. CNN ran a story about health care in Europe which drove home this point. Unfortunately, no one seems to address what happens to our country when people are no longer able to be productive citizens, when children are unable to learn or are born with disabilities because of the poor quality or lack of health care in this country. Is not right to life beyond birth an important value we want to aspire to in our country? Finally, there is no mention of Mental Health and how attending to Mental health can save money and improve overall quality of life.

    October 19, 2008 at 15:09 | Report abuse | Reply
  19. Marsha

    I am an employer in Wisconsin.
    I read with amazement the $3000 average cost for a family health plan in Wisconsin.
    Who sells insurance at that price? What kind of coverage do you get for that?

    You can barely get coverage for an individual at that price. Even 8 years ago, a policy for a 25 year old female employee with insurance that included maternity coverage cost $300/month, a family policy cost $7700. Today, those policies have gone through the roof. Currently a high deductible HSA policy costs $4400/year for a LIMITED family of 2, and that is when purchased as part of a large group. When polling a number of very small businesses, owners were paying more, sometimes as much as $16,000/year for a family plan. And two small business owners with pre-existing conditions are paying $30,000/year for coverage. BadgerCare, the state run plan for those who are denied coverage by insurance companies, is costing people between $900 and $1500/month.

    October 20, 2008 at 03:45 | Report abuse | Reply
  20. Linda

    I would like to point out that McCain states that he is not raising taxes when in fact he is raising them considerably when he taxes healthcare benefits. In my situation it would put me at an income where I would also not be able to claim my property taxes and my income is only approximately $45,000/yr. My daughter and son-in-law and grandchildren have no healthcare. They are the working poor with a house that is worth so much less than their mortgage. So it takes part of my income to help with food, clothes, warm coats etc. McCain is a good man but he doesn't seem to know what life has been like for the average and low income American families.

    October 20, 2008 at 13:45 | Report abuse | Reply
  21. Suzanne

    What a lot of you guys are missing is that McCain's plan does not credit $5000. It is $2500 per adult/worker paying insurance. Not $5000 per person. The $5000 quote looks better for him because all you people see is the bigger number, but he is talking for a FAMILY, not per person... $2500 people is all you get per adult paying insurance. Plus you will be taxed on what you are paying upfront.

    October 20, 2008 at 16:30 | Report abuse | Reply
  22. Elizabeth Patterson

    I prefer Obama's plan because it's not just fairer, it's clearer and more easily understood. Obama will do his best to cover everybody in the nation. McCain won't try to do that and will try to confuse voters by lying about Barack Obama's heaalth care plan. I don't trust John McCain.

    October 20, 2008 at 22:24 | Report abuse | Reply
  23. Heidi

    Dr. Gupta,
    Thank you for addressing the issue of the candidate's health care plans, but I agree with many of the others – your information only addressed the surface issues. You need to really look at these plans and think about what will happen if they actually pass. On the surface, McCain's plan sounds great; with words like "portable and $5,000!!". However, people with pre-existing conditions (which may be very minor, but still really play into getting (not getting) coverage) will really be limited especially when employers aren't able to provide coverage anymore. Which will happen if all of the healthy and young employees leave the plan and get coverage in Wisconsin (which, oops – probably won't cover well-visits or mamograms) and they are left trying to cover the older (and I mean 40-year olds) and sick (and I mean people that may have had an asthma attack within the last 10 years!) I am sure that most of my friends (and I am under 40) and their families would be surprised how hard it is to find coverage outside of their employer's plan. I have tried to read everything I can about McCain's plan and I think by doing so I am creating a pre-existing condition (high blood pressure...)

    Dig deeper. Take it to the next step. And then give out information.

    October 21, 2008 at 23:44 | Report abuse | Reply
  24. Jen

    My husband works for a large hospital in Milwaukee. The thought of a Federal mandate to shift to electronic records is making his IT department very nervous about losing their jobs. They already outsource 25% of their work to a company in India. The thought is that forcing the healthcare industry to do this with little financial support to the companies is a recipe for disaster.

    And let's all be honest, the $2500 that Obama is promising won't be seen for a long time. Do you know how long electronic records will take to implement? Maybe in the next President's term, but not in the next four years.

    So, for us, McCain's $1500 in a health savings account is much better. And my husband will get to keep his job!

    October 22, 2008 at 09:08 | Report abuse | Reply
  25. barb

    I am not married, but I do have a pre-existing condition. I called my insurance company at work and they told me if I opted for not to take their insurance and pay for a plan it would run me an average of 8-10, 000 bucks to cover my condition in WV. I do not not know about any of you all but I can not afford to spend an extra $3,000 to $5000 dollars on health care.

    October 22, 2008 at 10:58 | Report abuse | Reply
  26. cris

    Obama's plan sure sounds better, but what is the cost? In Cuba your health care is free, but how do people live? There was an epidemic of optic neuritis in Cuba a few years ago which caused many people to permanently become blind as a result of vitamin deficiencies (B-12) because meat is so scarce. I would agree that everyone should have top notch healthcare, but many people don't want to pay for that. As far as health care being a "right" That is BS. You are then implying that Africa has no "rights". They don't have the money. In the end that is what it comes down to and NO, WE DON'T have the money to provide the kind of healthcare Obama suggests. On another side, since when does the government have the right to impose that on us? We the taxpayers, the workers, the people NOT on MEDICAID are the ones that will pay. We live in a Capitalist society, I'm sorry if that bothers you, but there are other options approx 90 miles south of here. Doesn't anybody wonder people want to live here and not in countries like Cuba?

    October 22, 2008 at 11:21 | Report abuse | Reply
  27. georgemarvin

    @Jen: The $2,366 you're paying for health care right now is your portion of the total premium. Your employee contribution is probably 20% of the total. Your employer pays the other 80% of your health care premiums on your behalf. It is an employee benefit. That means that your family plan probably actually costs about $12,000 per year. If your family income is about the national average, under McCain's plan, your health care costs will be taxed at 25%. That means that you will pay an additional $2,400 in taxes each year, but your employer's insurance company will receive a check for $5,000 of the total premium each year. Your total out of pocket expense for health care will only be $34 more than you are paying now.

    October 23, 2008 at 03:07 | Report abuse | Reply
  28. Janie Noller

    One thing I haven't heard reported is how many people would be removed from the ranks of the uninsured under each plan–I have seen two separate evaluations that give Obama's plan a definite edge in getting more people insured for about the same amount of money–it would seem to me that the issue of who gets the most bang for the buck should play into an evaluation of their plans. Thank you.

    October 26, 2008 at 11:34 | Report abuse | Reply
  29. Judith Williams

    I am a Registered Professional Nurse with over 25 years of practice, and I can tell you that we have already seen the McCain plan in action under the Republican party for decades – – it was called "Managed Care." Those of us in the profession called it "Mismanaged Care". It is a further recipe for disaster. Those who are left out of care now will simply be left out in the future, and we'll see the ERs and hospitals in worse straights then they are already in, with longer waits, no available beds, and the poor and disenfranchised with no where else to go for help. Hospital bills will look even bigger since there will be no one else to pay for them, and more bankruptcy will be the result.

    November 2, 2008 at 09:58 | Report abuse | Reply
  30. Barbra Davies

    I actually posted this in the wrong area so will repost it here. As a Canadian & a Registered Nurse I look on the above postings with amazement. Our health care system is not perfect nothing is but no one dies because they can't afford medical treatment and supplementary insurance is cheap & affordable. What I do feel is that the big insurance companies stand to loose alot of money if health insurance is taken over by the government. Instead of looking at it as a partnership where the basic are supplied by the government (Dr. visits, hospital visits, home care) and the insurance companies provide the sipplementary medications, semi-private hospitalization etc. I have suplementary insurance, my deductible is $50.00 per year my monthly payments are $45.00. our MDs are paid my the government the& the Docs we were loosing to the US are slowly coming back to Canada I wonder why? Our poor & elderly are looked after. My Husband's prescription meds were $1,100.00/mo our insurance paid for them 100%, now because he's 65 the government provides 100% coverage.

    November 9, 2008 at 10:05 | Report abuse | Reply
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About this blog

Get a behind-the-scenes look at the latest stories from CNN Chief Medical Correspondent, Dr. Sanjay Gupta, Senior Medical Correspondent Elizabeth Cohen and the CNN Medical Unit producers. They'll share news and views on health and medical trends - info that will help you take better care of yourself and the people you love.