Huffington Post Gets McCain Health Plan All Wrong

RJ Eskow of the Huffington Post this week wrote a critique of the McCain health care plan.  In it, he managed to get one major fact completely wrong.  He also ignores the effects that higher deductibles can have on controlling costs, and makes the perfect the enemy of the good.  Let's take each one piece-by-piece:

1. The Fact He Got Completely Wrong.  Eskow asserts that employers will lose their tax deduction for health care provided, and the individual market will therefore be the only place people can get coverage.  That's wrong.  Employers will still be able to take a deduction for health insurance provided to employees.  The difference is that employees will have to report the value as income, and then take the $5000 tax credit ($2500 for singles).  In other words, absolutely nothing--nothing--changes from the employer perspective.  Individuals covered in the small- and large-group markets would have no difference than under the current setup.
2. The Effect of Higher Deductibles.  Not mentioned in the critique is the fact that the McCain plan seeks to turn health insurance into something more like car insurance.  Just like a car owner pays for tires and oil out of pocket, so would the patient do so for routine medical expenses.  Insurance is there for particularly high-cost years.  There's an HSA to serve as a piggybank for these routine costs.  Just last week, AHIP (the insurance industry trade association) came out with a nationwide survey of HSA plans.  In the individual market, the most popular plan has a familiy premium of $5125 per year when the primary insured is between age 30 and 54.  That means the McCain tax credit pays for almost all of it.  The average deductible in the individual market is $4846.  An HSA contribution would be tax-deductible, so our hypothetical family could get back about a third of what they put into their HSA (depending on their tax bracket).  Even better, HSA-compatible insurance premiums have been growing at a rate pretty close to general inflation (not bad considering health insurance tends to grow at double or triple that rate).
3. Making the Perfect the Enemy of the Good.  The McCain plan doesn't claim to fix the entire health care system.  What it does seek to do is make health insurance more affordable, so that more people will purchase it.  Yet, all Eskow can do is bash state high-risk pools and overestimate the difficulties of navigating the individual market.
   What about the fact that millions of Americans currently receive no tax break whatsoever for health insurance?  What about them?  What about the Americans whose employers are dropping coverage under current rules?  Shouldn't we give a simple tax credit for these people?

Comments

[CanDoc]

That's why I have been blogging for McCAIN-COBURN 2008. Dr. Tom Coburn - distinguished US SENATOR, PATRIOT AND CITIZEN LEGISLATOR , HAS THE KNOWLEDGE, EXPERIENCE,courage, charisma and dedication to serve our nation and restoring it to the Greatness we had once envisioned. He is our present day LINCOLN

[CanDoc]

Dr. TOM COBURN's VIRGINIA company , which he managed with his degree in Business and President of his University Business school and medical school class , actually grew american jobs IN VIRGINIA , he brings the entire South , and strengthens McCAIN'S Maverick status , as fiscal and social conservative 'delivers the goods' and exceeds readiness threshold as VP THAN ANYONE ELSE AND HEALTHCARE WILL BE last issue Dems will try to win on in the General election -last chance for McCAIN TO WIN a razor thin victory -McCAIN-Coburn 08 !