The healthcare plans of both major presidential candidates contain proposals that, if implemented, might reshape the insurance industry.

• Sen. John McCain, R-Arizona, centers his approach on reforming the tax code and creating incentives to buy individual health insurance.
• McCain’s proposals include tax incentives favoring individual over group coverage; interstate sales of health insurance; federal support for high-risk pools; and quality- and outcome-based reimbursement to providers.
• Sen. Barack Obama, D-Illinois, proposes building on existing private and public group insurance with shared responsibility for coverage.
• Obama proposes a public plan for individuals and groups modeled on federal employee benefits; mandatory insurance for children; expanding government programs such as Medicaid; requiring employers to offer coverage or contribute to the public plan; mandatory guaranteed issue; and medical loss ratio disclosure and limitations.
• The McCain plan’s flat tax credit may reduce both insurance enrollment and revenue, while a shift to the individual market would bring higher administrative expenses for carriers.
• Declines in revenue and erosion of margins under the McCain plan may be offset in part by reduced costs through quality-based reimbursement to providers.
• Under Obama’s plan, enrollment likely would increase in the near term and reduce the number of uninsured, possibly easing the financial pressure of uncompensated care on hospitals and physicians.
• Obama’s proposed public plan may attract profitable small-group business, squeezing private carriers’ margins as they seek to compete.