Finally, what we have always known has been confirmed by Republican presidential candidate John McCain’s senior economic policy adviser Douglas Holtz-Eakin; that the health care ‘tax credit’ proposed by the McCain campaign is meaningless. The $5,000 credit would NOT help employees purchase their own health care coverage because the expensive coverage most of them can barely afford to pay for NOW is still better than ANYTHING “they could get with the credit” says Holtz-Eakin. Also, under the McCain plan the annual value of your health insurance coverage provided by your employer would be taxed by the government as additional income!! Under a McCain administration, that would be a tax INCREASE on hard-working, middle class Americans already struggling each month to pay their portion of the health insurance offered by their employers.
Another admission from the McCain campaign that their health care plan is nothing more than a bunch of right-wing platitudes thrown together without any real serious thought as to how to solve the health care crisis. From CNN:
Changing the tax treatment wouldn’t hurt the employer-sponsored system and would allow more of the uninsured to buy their own coverage, [the McCain campaign says]. Also, his advisers say a McCain administration would keep an eye on the credit to make sure it didn’t lag behind the cost of coverage, while also working to lower the rate of medical inflation.
Younger, healthier workers likely wouldn’t abandon their company-sponsored plans, said Douglas Holtz-Eakin, McCain’s senior economic policy adviser.
“Why would they leave?” said Holtz-Eakin. “What they are getting from their employer is way better than what they could get with the credit.”
The entire premise of McCain’s health care plan is that people can do better on the free market. That’s why you get a tax credit. That’s why you would be able to buy insurance across state lines. The market supposedly makes health insurance cheaper, makes your health insurance company offer better coverage, and makes buying the insurance you need easier. And things like tying health insurance to employment are anti-free market, which is why the McCain plan taxes employer health benefits to encourage people to get insurance on the individual, free-er market.
Of course, tying health care to employment is the way we’ve done things in America for generations, and it turns out it’s also pretty popular. (Not to mention that insurance companies have to cover you through an employer health care plan, while they can deny you for pre-existing conditions on the individual market.) And so, in the face of political pressure, you have Douglas Holtz-Eakin admitting the truth.
Faced with the fact that destroying our employer-based health care system isn’t exactly a priority for most Americans, he argues that the McCain plan wouldn’t actually destroy the employer-based system. Why? Because the tax credit McCain is offering wouldn’t buy a decent health care plan, even for the young and healthy!
Let’s unpack this a little bit more. According to Holtz-Eakin, John McCain doesn’t actually want to dismantle the employer-based health care system. But, McCain’s plan would tax any health benefits you’d get through work. So, if Holtz-Eakin is right in saying you’d get better coverage through work than you’d get with the tax credit on the individual market (and he probably is), and if he’s right in saying most workers won’t drop their employer-based insurance for the individual market because they’re getting a better deal at work, then John McCain is simply proposing a tax on your current health care benefits without giving you anything in return. That’s the worst kind of tax increase.
Shorter Douglas Holtz-Eakin: John McCain’s health care plan won’t destroy the employer-based insurance system because McCain’s plan doesn’t work.
Remember John McCain: Less jobs, more war? Well now it’s John McCain: More tax, less benefits.
(also posted at the NOW! blog)