The more you look at McCain’s health plan, the worse it gets.
Even the people who like McCain’s plan (Why McCain has the best health-care plan over at CNN Money) have noticed that:
To his credit, McCain does have a plan for relatively young, low-income Americans who can’t afford insurance. “We would increase the tax credit according to income so that poor families could buy insurance,” says Douglas Holtz-Eakin, McCain’s policy director. But McCain sorely lacks a plan for people in their 50s without corporate benefits, and Americans with pre-existing conditions, who would be brutally stripped of coverage if insurance crosses state lines. “For his plan to work, McCain has to tell us how he would deal with the old and sick,” says Jon Gruber, an MIT economist. “If McCain doesn’t tax the healthy to pay for pre-existing conditions, as happens under community rating, he has to tax the taxpayer. That means his plan will require huge subsidies he’s not talking about.”
If you’re interested in why they think McCain’s plan is better than the Democratic plan, it’s because under the Democratic plan even people who can’t afford insurance would get insured.
Let’s talk about tax credits. You know something? If you offered a $100,000 tax credit on yachts, most people still couldn’t afford a yacht. With the average family insurance plan running $12K a year, a family that’s making $26K is going to have a hard time buying health insurance, and telling them that they’ll get a $5K tax credit at the end of the year—that they can just cross off $5K from their tax bill come April—isn’t going to help.
And just try getting insurance at all if you have a pre-existing condition. Go ahead, try. I’ll wait.
Here’s a fact: People who don’t have health insurance don’t get health care. Sure, if they’re unconscious or spurting blood they can come to the Emergency Room, but that’s a cruddy way of getting basic health screening that keeps things from getting to catastrophic conditions.
I’ve seen this myself. I’ve seen a man in his mid-forties die, choked on his own vomit, unconscious from undiagnosed diabetes. Why undiagnosed? He didn’t have health insurance to cover physicals. He was working three jobs—but they were all part-time jobs with no benefits.
McCain’s health care plan is to tax job-based health insurance as income, and to remove the incentives for employers to offer health insurance. The obvious result will be for employers to drop health insurance, forcing everyone to buy insurance on the economy, or do without. The result of that won’t be healthy competition that will lower costs for everyone. It’ll be higher costs and fewer options for the poor, the old, and the sick. That is, the people who need health care. Young, healthy, rich people won’t be affected—until they get old, sick, and subsequently poor.
Several health care policy analysts said the plan could expand insurance choices for some people but has the potential to backfire by undermining employer-based coverage for many workers.
“If you’re not careful, it could lead to a substantial decrease in the number of people with coverage,” said Stuart Altman, the dean of the Heller Graduate School for Social Policy & Management at Brandeis University, who has frequently advised politicians on health care reform.
Individual health insurance plans are often more expensive - or include major exclusions - for sick and old customers, because they don’t spread out risk like group plans.
“What we’ve found is that the individual market doesn’t work very well,” Altman said.
According to the nonpartisan Kaiser Family Foundation, an average family health insurance policy cost more than $11,000 last year. McCain indicated in his speech that states might develop means to help lower-income individuals buy insurance, but critics said $5,000 would not bring many uninsured families much closer to affording coverage.
“If you think about what an average premium is right now for employer-based coverage - it’s about $12,000 per family - then a tax credit is obviously going to fall short,” said Sara Collins, an assistant vice president at the Commonwealth Fund, a foundation that sponsors research on health care policy.
The health care plans that have been offered by Democratic candidates for president have been focused on providing universal health insurance coverage, but McCain said he believes health care costs are the main barrier for many who have been pushed outside the market. Rather than government plans and mandates, he said, the government can increase coverage by lowering the costs of care and encouraging competition.
If a foreign power attempted to impose the McCain health care plan on America we would consider it an act of war.