Thursday, October 09, 2008

McCain's Healthcare Plan

Obama and Biden have been distorting McCain's health care plan both in the debates and in commercials. Obama says it will be a net tax on you and that you'll be less likely to have insurance. This is absolutely false.

The average employer contribution to family coverage is $9,325. Everyone with employer contributions under $20,000 benefits under McCain's plan. McCain's plan allows for you to have a $5,000 tax credit to buy health insurance for your family if your job doesn't include it as part of your compensation. Most jobs would probably still offer health insurance in order to attract good employees, but the new tax credit may encourage some people to choose to get their own insurance and get more in cash from their employer.

One advantage to having individual health insurance is that it is portable if you switch jobs. McCain's plan also allows you to shop across state lines for the plan that fits your needs best. Obama considers this incredibly dangerous because you are too stupid to know which plan to choose. States usually weigh down insurance plans with too much regulation. Liberals love it when the government requires insurance companies to cover everything, but it makes insurance incredibly expensive. You might want a more basic plan you can actually afford, but the state government has probably made that plan illegal. McCain would allow you to choose from plans offered around the country. McCain also favors tort reform to prevent frivolous lawsuits that also drive health care costs up. Obama opposes tort reform, as do most Democrats who get millions from trial lawyers.

Obama's plan is to force employers to either provide health insurance or to pay a fine to the government (Obama says "asking employers" instead of "forcing" like they would have any choice in the matter). It's really impossible to know the impact of this plan because Obama refuses to say how much the fine would be. If it is high, it would encourage employers to offer health benefits, but it would also destroy jobs for people who currently don't have health insurance because many employers wouldn't be able to afford it. If the fine is low, it would encourage the employer to just enroll the employee in the government's plan and we would see a mass exodus from private insurance plans into the government plan. Voila, government run health care. All-knowing government officials would then ration health care to keep down costs and the free markets role in health care would be over.


Kyle Hommes said...

I am wondering what you think of the McCain plan to start taxing health care benefits. I have tried to research this, but I haven't found a lot about it. McCain's website merely says that he would change the tax code, but does not give specifics.

I will take a stab at what I think He is proposing. You can keep your employer based health insurance. If you do that, you do not receive the tax credit. If you do take the tax credit, then the money that you pay toward health insurance would be taxed, where as, currently it is not. Am I right on this or not?

Jon Vander Plas said...

If you don't have employer based health insurance and buy your own, there is no tax benefit. Employer based health care is currently not taxed as income. As I understand it, McCain would flip flop this scenario with the $5,000 tax credit. The idea is to move away from employer based health insurance so people can have health insurance that is more affordable and portable if they switch jobs.

I also like the idea of being more personally involved in your health plan. A big reason health care costs have sky rocketed is that most people don't take care of their health very well. Employer based health care spreads this increased cost around while, in theory, individual health care would give people more of an incentive to exercise and eat right.

Allowing people to shop across state lines and tort reform would have an enormous impact on the cost of health care as well.

Kyle Hommes said...

I am worried about people, like my wife, who get sick often and have to be on group plans because individual plans will not take them. She is gluten-intolerant, and did not find out until last year. This caused her immune system to attack itself, meaning that whenever she got a simple cold, she would eventually have to go to the doctor for antibiotics because her body could not fight it. When we applied for an individual plan for her she was turned down because she was sick too often. I know that both candidates pledge to reform that, but I wonder how effective those reforms will be. With out group plans, she may not be able to be insured.

I did not know that the tax credit could only be used if you give up an employee plan. That means there is no benefit for those who do not have health insurance now. I'm not sure I like that. I thought that tax credit was for anyone who purchased their own plan. What does this do to get more people insured then? Is it merely a method of driving down the price because I am not convinced that will work, and many of the cheap plans are cheap for a reason, they don't cover a whole lot. There are things that I would love to go to a doctor about, but my plan doesn't cover them (for example, I could use some orthodics because I am very flat footed, but my insurance does not cover them, and I cannot afford them). I want better insurance, not just cheap insurance. I don't see how McCain's plan will give me better insurance.

Jon Vander Plas said...

Does your wife have a plan through work? Working in the health care field, I know it can be very expensive and that must be frustrating. I guess my wish is for people to understand that health care must be paid for. If you can't afford it, and still get it, that means someone else paid for it. There is infinite demand for health care if no one feels the cost. If government takes over health care, they will be forced to ration it to reign in costs and we will not be happy with how they ration it.

People that don't have employer based coverage should have the option to buy plans that cover only what they want to pay for. They can then pay cash for anything else. Tip: if you are a cash paying patient you can negotiate huge discounts. How many people want their car insurance to cover gas and basic maintenance on their car? Why not have health insurance with a high deductible and pay cash for all your office visits, prescriptions, etc. and pay a much lower price for the plan?

McCain's plan benefits everyone except those who get more than $20,000 in benefits from their employer. If you don't currently have health insurance, you still get the tax credit. Anyone who buys their own insurance gets the tax credit.

Kyle Hommes said...

Okay, my original understanding was that you would get it if you buy your own, but the way you described it, it sounded like you had to give up employer health insurance to get the credit.