Tuesday, September 16, 2008

The McCain Health Plan: Hold Onto Your Wallet!

Every cloud has a silver lining. Perhaps the silver lining of this week's economic crisis is that the candidates are once again talking about issues, rather than each other. So let's talk about an issue that McCain hasn't spent much time on: health care. And I don't understand why he isn't talking about it, as his plan will radically alter the healthcare landscape in this country.

John McCain's plan to provide health care to Americans is essentially reform of the tax code. If you receive health insurance through your employer, you don't pay taxes on the portion of your premiums that your employer pays. McCain would change that: this "income" would now be taxable.

Instead, McCain would offer a $2,500 tax rebate to all Americans for the purposes of paying for health insurance. But Americans won't get that money themselves--the health insurance company you select would automatically get that money to cover your premiums. And to incentivize cheaper insurance plans, if $2,500 exceeds the amount of your annual premium, you'll get the excess back. Of course, you can't spend it: it will be put in a Health Savings Account that you could use to pay deductibles or co-pays. (This is all detailed on the McCain website, here.)

McCain's theory is that if people are forced out of employer-provided insurance and into the insurance market, competition will magically drive prices down and make health care affordable for all. The New York Times' Bob Herbert has this to say:

This entire McCain health insurance transformation is right out of the right-wing Republicans’ ideological playbook: fewer regulations; let the market decide; and send unsophisticated consumers into the crucible alone.
You would think that with some of the most venerable houses on Wall Street crumbling like sand castles right before our eyes, we’d be a little wary about spreading this toxic formula even further into the health care system.

To me, the McCain plan is a bad idea on its face. But regardless of its merits, shouldn't Americans know that if they elect John McCain president, every person who has employer-provided health insurance will have higher taxes taken from their paycheck each week?

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