I am simply shocked that McCain's
Health Insurance Plan is not
getting more attention. It is absolutely disastrous.
McCain's plan is to tax group health insurance provided by
employers. It is a truly massive tax increase on the working
and
middle class at a time when many Americans cannot afford to
pay for
both gas and their mortgage payments. It will literally
eliminate
health insurance for tens of millions of Americans. Let me
explain
why. Right now, many employers subsidize the cost of health
insurance. A decent family policy costs about $1,000 per
month and
a decent individual policy about $500 per month. Many
employers pay
about two third of the cost, although some pay all for the
employee
themselves. The employee doesn't pay tax on either the
employee
contribution (taken out of paychecks in pre-tax dollars) or
the
employer contribution. So whoever pays it - it is tax free.
McCain wants to reverse that and tax the entire policy
premium. It will drive maybe half of Americans that get group
policies out of those policies. Here's why: Let's say a
police
officer makes $45,000 per year but gets family health
coverage that
costs $1,000 per month. The officer will still be getting
paid
$3,750 per month but will be getting taxed as if their income
was
$4,750 per month. Their take home pay will drop about $400
per
month. Who can afford that? Nobody. So either the individual
cops
will drop their coverage or the police department will just
get rid
of the group policy altogether and leave the officers to buy
their
own individual policies That's where McCain claims the free
market will come in. He
proposes offering a $2,500 per individual/$5,000 per family
annual
tax credit to buy individual health insurance policies.
Problem is
- this solution stinks. Here's why: 1. Health insurers are
allowed to engage in health
underwriting for individual policies, something they cannot do
by
law for group policies. What that means is they will only
accept
young people with no health history. Most people over 40 will
be
turned down because of some kind of pre-existing condition.
How
many middle aged people have no health history -- no back
injuries,
no high cholesterol or blood pressure, no ovarian cysts or
abnormal
mammograms, no work related injuries, no excess weight . . .
? Very
few. 2. Even for the lucky few that will be able to find
individual coverage, roughly $400 per month for family
coverage or
$200 per month for individual coverage will not come close to
buying decent coverage on the private market. Even double
that will
only buy a lousy policy with big deductibles and all manner
of
exclusions and caps. The vast majority of people who find
themselves in McCain's new club of the uninsured will simply
give
up, go without insurance and pray each day they never get
sick
again. Eventually they (or someone in their family) will, and
they
will be wiped out financially. McCain's plan will mean health
insurance companies get to
decide who in this country have health insurance -- in other
words,
only the young and healthy. Period. McCain's plan will have a
disastrous effect on one of the
biggest problems we have -- the growing numbers of uninsured
Americans. I am simply amazed it is not getting more
attention.