Page last updated at 18:59 GMT, Sunday, 26 October 2008

Vote USA 2008 issues: Healthcare

Healthcare - or the lack of it - is a burning issue for many US voters.

Americans are growing increasingly critical of their healthcare system.

It is the most expensive in the world and a large number of US citizens have no access to it.

Medicare: government-funded healthcare for over-65s
Medicaid: government funded healthcare for poor people
Employer-funded health insurancee: paid by salary deduction
Uninsured: treated in emergency rooms only

Until the recent economic downturn, healthcare often topped the polls when people were asked what their main domestic worries were.

State-funded healthcare exists for the elderly and the poor, and two-thirds of employers provide health insurance.

But one in six people - over 40 million individuals - are left uncovered. They are likely to be the young, the poor and the self-employed, and recent immigrants.

Without health insurance, they often have to rely on hospital emergency rooms for care or go without treatment.

Only 5% of people buy their own health insurance - which tends to be relatively expensive. Some 10% are poor enough to qualify for government-sponsored Medicaid.

A Pew Research Center poll in August found that almost three-quarters of registered voters consider healthcare a very important issue, when they decide how to vote - just below the economy and energy.

Differing approaches

How to broaden coverage is one of the key problems.

Many Democrats want to see universal healthcare but are wary of radical approaches after the failure of a reform attempt in 1994 - spearheaded by Hillary Clinton while First Lady - which contributed to the party's big losses in that year's congressional elections.

The early experience of the state of Massachusetts, which has pioneered a mandate system (requiring people to have healthcare provision), suggests that more people sign up for insurance - stimulated by a small tax rebate - but coverage is still not universal.

For 30 years the cost of healthcare has grown at double the rate of economic growth

Barack Obama backs universal healthcare coverage but would not mandate people to sign up for health insurance, except to cover children. He would provide subsidies to make insurance more affordable.

Under his plan, insurers would be unable to refuse coverage to people or charge them more because of pre-existing conditions.

Mr Obama says his plan would be paid for by rolling back President George W Bush's tax cuts for households earning more than $250,000, and by cutting the costs of healthcare.

Republicans - including the party's presumptive nominee John McCain - have a different approach to expanding coverage.

Mr McCain wants to create tax incentives to encourage more people to take out their own health insurance, ending their dependence on employers.

He says controlling costs is the top priority in making healthcare affordable for all Americans, and argues increased coverage is possible without raising taxes.

Two-trillion-dollar bill

The healthcare system's growing costs currently threaten to bankrupt both companies and the government.

For 30 years the cost of healthcare has grown at double the rate of economic growth, and as a result the US now spends $2 trillion per year on health, 15% of every dollar in its economy, and twice as much on a per capita basis as in Europe.

About half of healthcare costs are paid by federal and state governments, through a payroll tax that funds Medicare (the programme that provides healthcare for elderly people) as well as the Medicaid programme (for poor people).

A similar amount is paid by companies. Only a small share (13%) is paid directly by individuals.

Voters are angry because companies have tried in recent years to shift the costs of healthcare on to them, by:

  • Increasing the premiums they are charged for coverage through the workplace
  • Lowering their coverage
  • requiring greater co-payments when they are ill.

The result of the complicated system has been high administrative costs (taking up 15% to 20% of the total) as each part of the system tries to shift costs to others.

Electoral College votes

Winning post 270
Obama - Democrat
McCain - Republican
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