Beware of Republicans Bearing Gifts -- McCain's "Health" Plan Guts Employer Coverage

BEWARE MacPalin's health insurance plan, or should I say, non-plan. For those who do not have health insurance, they get what Bush-Cheney offered -- TAX CREDITS -- which is nothing if you do not make enough money to pay taxes or pay little taxes. If you have employer provided insurance, he has something that should make you shudder -- (READ THIS CAREFULLY) --

Senator John McCain's (R-AZ) health plan would eliminate the current tax exclusion of employer payments for health coverage, replace the exclusion with a refundable tax credit for those who purchase coverage, and encourage Americans to move to a national market for nongroup insurance. Middle-range estimates suggest that initially this change will have little impact on the number of uninsured people, although within five years this number will likely grow as the value of the tax credit falls relative to rising health care costs. Moving toward a relatively unregulated nongroup market will tend to raise costs, reduce the generosity of benefits, and leave people with fewer consumer protections. [Health Affairs 27, no. 6 (2008): w472-w481 (published online 16 September 2008; 10.1377/ hlthaff.27.6.w472)]

A description of Senator McCain's plan is available on his Web site and in several speeches he has given.1 These sources reveal a vision of what, from Senator McCain's perspective, a desirable health care system would look like. At its heart, the system he envisions is one in which many more--perhaps most--insured Americans would buy health insurance and health services in a national, relatively unregulated, competitive market, either on their own or as members of fluid, voluntary associations, such as churches or clubs. Because this would be a radical departure from the current system, its likely effects deserve close attention.

Eliminating the tax exclusion would greatly reduce the number of people who obtain health insurance through their employers.7 This decline would be driven by three factors: the effective price of employer-sponsored coverage would increase, the nondiscrimination rules would no longer apply, and low-risk employees would have less incentive to remain in employer-sponsored groups.

According to the respected journal Health Affairs, "Achieving Senator McCain's vision would radically transform the U.S. health insurance system. His plan would alter the nature, source, and financing of coverage for the nearly 160 million Americans who now receive health insurance through their employers. We estimate that twenty million Americans--about one in every eight people with job-based coverage--would lose their current coverage as a result of the change in the tax treatment of coverage. Initially, this loss of job-based coverage would be offset by an increase in coverage in the nongroup market (although not necessarily for the same individuals). Within five years, however, the net effect of the plan is expected to be a net reduction in coverage relative to what would have been observed if the tax treatment of employer-sponsored coverage remains as it is now.

"The decline of job-based coverage would force millions of Americans into the weakest segment of the private insurance system--the nongroup market--where cost sharing is high and covered services are limited. Senator McCain's proposal to deregulate this market would mean that people in it would lose protections they now have. These changes would diminish the security of coverage for most Americans, especially those who are not, -or someday will not be--in perfect health."

In other words, the McCain-Palin plan will not come near accomplishing national health insurance coverage for all people, or even make more people insured, but actually will result in less people insured, because his plan is an ideological, supposedly "free-market", deregulated plan, not a practical, real-life plan to meet people's real needs. Deregulation is the Republican watchword, and it did so much for us in housing loans and on Wall Street, did't it?

By contrast, the Obama-Biden team has a plan written for real people and real needs. It is pragmatic and puts people first, not ideology. Check their plan out at http://www.barackobama.com/issues/ It is a serious plan for helping folks, not a sophisticated smokescreen like the McCain and AMA proposals.