MCCAIN'S HORRIBLE HEALTH CARE PLAN

September 30, 2008 | Vetting explained

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skleger

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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.

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