Two new articles today and yesterday are both praising the merits of McCain’s health plan.

From the Wall Street Journal, Almost Everyone Would Do Better Under the McCain Health Plan

The McCain health-care insurance tax credit may well be one of the most misunderstood proposals of this presidential election. Barack Obama has been ruthless in his attacks. But the tax credit is highly progressive and will provide a powerful incentive for people to purchase health insurance. These features under normal circumstances should endear Democrats to the proposal.

What is striking about this picture—and contradicts Mr. Obama’s public comments—is that the McCain tax credit for the purchase of health insurance exceeds the value of the current exclusion for all income levels shown. Indeed, it generally provides more resources to purchase health insurance than the existing exclusion. The total subsidy for health care would rise from about $3.6 trillion over 10 years today to roughly $5 trillion under his proposal.

Finally, the credit has important implications for the nation’s finances down the road. This is perhaps the most important aspect of the proposal.

There is an enormous unfunded liability associated with the major entitlement programs of Social Security, Medicare and Medicaid. If left unchecked, the growth in these programs will nearly double the size of the federal government by 2040, consuming roughly 40% of the nation’s output rather than the 20% today. While the growth in Social Security is largely the result of demographics, the growth in Medicare and Medicaid is also driven by the rapid growth in health-care spending. This is where a proposal like Sen. McCain’s can be so important.

The elimination of the income-tax exclusion should reduce private health-care spending; to the extent this reduces the cost of health care, it should also put downward pressure on the growth of Medicare and Medicaid costs. Thus, by removing the tax bias for more generous health coverage, the McCain health credit also has the potential to provide important dividends to the entitlement problem down the road.

On the other hand, a story in The New York Times entitled Businesses Wary of Details in Obama Health Plan illustrates some of the many concerns over Obama’s plan:

Dave Ratner, owner of Dave’s Soda and Pet City, is pretty sure he is about to get “whacked” by the new state law that requires employers to contribute to health care benefits for their workers or pay a $295-per-employee penalty. In order to avoid thousands of dollars in fines, Mr. Ratner is considering not adding part-time workers at his four pet supply stores in Western Massachusetts.

But the penalty in Massachusetts is picayune compared with what some health experts believe Senator Barack Obama, the Democratic presidential nominee, might impose as part of his plan to provide affordable coverage for the uninsured. Though Mr. Obama has not released details, economists believe he might require large and medium companies to contribute as much as 6 percent of their payrolls.

That, Mr. Ratner said, would be catastrophic to a low-margin business like his, which has 90 employees, 29 of them full-time workers who are offered health benefits.

With Mr. Obama’s plan, business leaders say, the devil will be in the unknown details.

Left undefined has been what size firms would be exempted, what constitutes a “meaningful contribution,” and how much noncompliant businesses would be required to pay. Senator John McCain, the Republican nominee, badgered Mr. Obama in two of their debates to define the penalty, but Mr. Obama did not rise to the bait.

Is anyone else at least mildly concerned that Obama either does not know, or simply does not want to be forthright and reveal the details of his health plan?  Essentially he’s saying “I won’t tell you how my plan works, so you’ll just have to trust me.“  The only conclusion I can draw is that his plan is going to be very detrimental for many businesses, which is why owners are worried, and why Obama is not revealing the information because it will cost him votes.

An article, Obama vs. His Advisers - On health care, they once liked McCain’s principles. spells out how much McCain’s plan appeals to Democrats.

One underreported story of this election is how heavily John McCain has been damaged by Barack Obama’s television ad assault on his health-care plan. A lot of voters seem to believe the Democrat when he says that Mr. McCain wants to deny them coverage or bankrupt them with crushing hospital bills.

Even so, Mr. Obama’s tactics are especially cynical because his own health-care advisers support plans much like Mr. McCain’s. Or at least they did before joining up with Mr. Obama.

When President Bush unveiled a health reform similar to Mr. McCain’s in 2007, Mr. Furman [Mr. Obama’s economic policy director] co-authored a Tax Policy Center paper that called it “innovative and a step in the right direction.“ As recently as May, he published a long article in Health Affairs on the possibilities of health-care tax reform.

What a difference an election makes. “The choice you’ll have,“ Mr. Obama warned of the McCain plan during one of the debates, “is having your employer no longer provide you health care.“ Sounds terrible. But wait, let’s consult another one of Mr. Obama’s advisers. David Cutler, the Otto Eckstein Professor of Applied Economics at Harvard, put it this way: “Health insurance is not something that is made better by tying it to employment. As a result, essentially all economists believe that universal coverage should be done outside of employment.“

These advisers know that Mr. Obama’s claim that Mr. McCain will tax health benefits “for the first time in history” is particularly disingenuous. For people who stick with employer coverage under the McCain plan, the money employers take out of wages to pay for insurance would be taxed, but the new credit more than covers the bill. The people who decide to buy coverage on their own would see their wages rise. And everyone who joins the individual market—many of them uninsured now—would be equipped with new health dollars, instead of paying with after-tax income.

Obviously neither Mr. Furman nor Mr. Cutler would endorse the McCain plan outright. They are, after all, Democrats. Liberals who support rearranging the tax code for health care think it must be accompanied by other insurance reforms to protect families in the individual market that Mr. McCain doesn’t include. Even so, speaking on a Tax Policy Center panel on taxes and health insurance in February of this year, Mr. Furman said that “I think we should be cheerleading” the emphasis on tax reform, “not writing it off.“

He even prefaced his remarks by joking, “this talk might actually sound like a John McCain rally.“ Maybe Mr. Obama should be running attack ads against his own economic guru.

From the Associated Press, McCain health plan calls for shopping around

John McCain’s health plan would bring about a dramatic shift in how millions of people get health insurance coverage. He would let people shop around for plans offered by insurers in other states. New Yorkers could look to Alabama, for example, or any other state when shopping for coverage.

“Why not? Don’t we go across state lines when we purchase other things in America?“ McCain asks.

The idea sounds simple, but has huge implications.

Health care experts say McCain’s plan would make it easier for younger and healthier people to shop around for affordable health insurance coverage. That’s a huge group: Nearly half the nation’s uninsured adults are ages 19-34.

McCain has acknowledged the need to help out those chronically ill who could be left behind. His solution: a “guaranteed access plan” that each state would operate under the direction of a board representing consumers, insurers and businesses. Each state’s plan would offer multiple coverage options with premiums not exceeding 150 percent of the standard plan sold in the state.

The plans would need generous government subsidies to cover expenses, so McCain says the federal government would dedicate $15 billion to $20 billion a year to their operation.

If participants had incomes below three times the rate of poverty, the government would subsidize the cost of their premiums on a sliding scale, with the poorest getting the most help.

Obama’s health care plan is more of the same - it is about trying to prop up a broken system for a little longer, simply prolonging its eventual collapse.  For someone “all about change” Obama’s plan is not nearly as revolutionary or progressive as McCain’s, and will not actually fix the system.

And I’ll bet if you asked all those babies out there that survived botched abortions, they’d go with McCain’s plan hands-down. Especially the ones in Illinois.

It was socking to us that late abortions are allowed in the USA. My husband is pro-choice and I am anti -

John - 28 October 2008 09:47 AM

This was an opinion on the Wall Street Journel.

Isn’t everything to a certain extent?

John - 28 October 2008 09:47 AM

This was an opinion on the Wall Street Journel.

About the author:

Mr. Carroll served as deputy assistant secretary for tax analysis at the U.S. Treasury. He is now vice president for economic policy at the Tax Foundation, and an executive-in-residence with American University’s School of Public Affairs.

This opinion failed to mention that McCain’s plan is okay as long as their are no pre-existing illnesses.  What happens to the billions of people that have pre-existing illnesses who will not be able to get insurance.  We are back in the same boat (or even worse).

dololly - 28 October 2008 01:18 PM

This opinion failed to mention that McCain’s plan is okay as long as their are no pre-existing illnesses.  What happens to the billions of people that have pre-existing illnesses who will not be able to get insurance.  We are back in the same boat (or even worse).

Actually, that is discussed in detail.  Obama’s plan binds people to insurers.  You are bound to the insurance your employer has, or to the insurance the government provides (which is by state).  Those are the people out of luck if they have pre-existing illness, because they cannot shop around.

Since McCain’s plan encourages people to seek their own insurance instead of forcing them to use whatever their employer feels like offering (which numerous experts in the article, including Obama’s own advisors, recommend) they are free to shop for the insurer that best suites them, and that includes crossing state lines.  The article also mentions a 150% cap to help those that are chronically ill (which is exactly what you are talking about with pre-existing illness), and I even quoted that directly:

McCain has acknowledged the need to help out those chronically ill who could be left behind. His solution: a “guaranteed access plan” that each state would operate under the direction of a board representing consumers, insurers and businesses. Each state’s plan would offer multiple coverage options with premiums not exceeding 150 percent of the standard plan sold in the state.

There is a reason so many experts like McCain’s plan - it will revolutionize our health care for the better.  It is a real, long-term fix, unlike Obama’s band-aid job of trying to patch things up by throwing money at the problem and trying to funnel that cash through the already-bloated bureaucracy of our federal government.

John McCain would almost completely change the way Americans currently obtain health coverage, keep the number of uninsured individuals about the same and make it more difficult and less affordable for people with health problems to get coverage. Here’s how it would work: McCain would use an approximately $3.6 trillion tax on workers over the next 10 years, take revenue from that tax, turn around and give it back to you as a credit ($5,000 for families; $2,500 for individuals) so you can buy coverage on the open market. This approach would replace the current income tax exclusion that allows Americans (about 140 million of us) to get health care from our jobs, tax-free. McCain’s plan would create a disincentive for employers to continue buying coverage, and as many as 20 million Americans could lose their employer-paid coverage under a McCain presidency. Even though those people could use their tax credits to purchase insurance themselves, there’s a good chance they would remain underinsured because individuals do not have the power that employers do to negotiate good rates from insurance companies. And $5,000 is too low to cover a typical family premium on the open market, which is closer to $12,000.

I don’t think I would want to lose my coverage through my employer.  I have had problems trying to get insurance before because of a little pre-existing illness that was not chronic(lasting for many years).  So I can imagine the difficulty of trying to get insurance without getting it from my employer on my income and the little $2500.00 tax credit for a single person.  I know what my employer has to pay each year and that is at a discount.  Beleive me, $2,500.00 is no where near enough for a premium.

New York Times Evaluates Both Plans 27 Oct 2008
“We believe that Mr. McCain’s plan, which relies on reshaping the tax code, is far too risky. It is likely to erode employer-provided group health insurance and push more people into purchasing their own insurance on the dysfunctional open market, where insurers often reject applicants with pre-existing conditions.“

“Mr. Obama’s plan is a better start than Mr. McCain’s. But it is still not likely to help all Americans who need and deserve affordable, high-quality medical care.“

“The great danger is that Mr. McCain’s plan will fragment the sharing of risks and costs — the bedrock of any good insurance plan — by enticing young, healthy workers to bail out of their employers’ group policies to seek cheaper insurance on their own. Their older or less healthy colleagues would be left behind, which would drive up premiums at work. The rising costs could lead many companies to drop their health coverage entirely.“

“THE OBAMA PLAN Mr. Obama would do far more than his opponent to address the nation’s shameful failure to provide health coverage for all citizens.“

“The nonpartisan Tax Policy Center estimates that the McCain plan would lower the number of uninsured by a mere two million in 2018, out of a projected 67 million uninsured in that year. The Obama plan would cut the number by 34 million, the center says, but still leave nearly 33 million uninsured.“

“Mr. Obama’s plan is the better one because it would cover far more of the uninsured, spread risks and costs more equitably and result in more comprehensive coverage for most Americans. We fear Mr. McCain’s plan would jeopardize employer-based coverage without providing an adequate substitute. At a time when so many employers are reducing or dropping coverage, that is not a risk that the country can afford to take.“

http://www.nytimes.com/2008/10/28/opinion/28tue1.html?_r=1&ref=opinion&oref=slogin

y’all are overlooking one little fact. IF (notice both capital letters) McCain somehow manages to win the election, he’s going to have a Congress with a majority of Democrats, so it’s not like any of his proposed plans are ever going to make it back to his desk for him to sign. Obama, on the other hand, may very well find himself with “carte blanche.“ If the Dems gain a few more seats, they will have a filibuster-breaking majority and be able to send bills through with brute force. I don’t know about you, but I would rather have a president with not-the-best ideas but no real power to enforce them, than a president with downright detrimental plans and absolute power, allowing him to force those bad ideas on us.

Yes, especially if the other Democratic senators behave like Obama has as senator - a mindless puppet that voted along party lines 96% of the time.

To Dan East

Do you have to pay for your health insurance?

My employer doesn’t provide insurance for me or my family. I pay $5400 per year just for me and my daughter and it increases about $600 per year. My wife’s employer pays insurance on her only. We have checked and to get family insurance through my wife’s employer or on or own it will be over $10,000 per year. If McCain’s plan is so great how will it help me?

At least from what I can see Obama will offer me the opportunity to get my insurance through the same company that provides the US Senators their insurance at a group rate.

toraybon,
try this website:

eHealth Insurance

I don’t know if you could get a better rate than you currently were quoted, but this site was linked to by another site that I really like and trust, Zander Insurance. It can’t hurt to get a quote, right? Like I said, I don’t know what kind of quote you’ll get, just trying to help.

I put in my own family information (me, wife, 2 kids, non-smokers, not college students), and most of the quotes I received had lower monthly premiums than you currently pay (I based it on $5400/year that you said you pay).

Chico - 30 October 2008 12:29 PM

troyabon,
try this website:

eHealth Insurance

I don’t know if you could get a better rate than you currently were quoted, but this site was linked to by another site that I really like and trust, Zander Insurance. It can’t hurt to get a quote, right? Like I said, I don’t know what kind of quote you’ll get, just trying to help. I remember before I had insurance through my employer, I checked around and family plans were running about 3 to 4 hundred per month. But that was a few years ago.

Thanks Chico. I got my insurance through a website, I can’t remember if it was that one or not. One of the problems is that in the area I live the doctors will only accept a few insurance plans. When I go to a website to get a quote and put in my zip code there are usually only one or two companies that come up. Another big thing is that when you get a quote through a website it is not what you end up paying. My original quote was $150 per month, after I filled out the application and answered all questions, rate was $350 per month. My daughter was born last December and adding her was an additional $100 per month. I’ve even raised the deductible to $750 per person to keep rates down.

I don’t think either candidate will do anything to help health care costs. They just tell you what you want to hear. What it comes down to is funding. I talked to Gov Tim Kaine and Virginia had a great proposal. They had come up with a plan that the employer would pay a small amount per month( I think it was $50, but I can’t remember for sure), the employee would pay a small amount and the state would pick up the rest. Guess what? They couldn’t find the funding for it.