McCain’s Health Plan Will Help More People

According to a top economist, 15-21 million currently uninsured Americans will insurance will be able to get insurance under McCain’s plan. That is about half of the current uninsured Americans.

Something the article does not mention is the fact that under Obama’s plan, insurance costs will go up. The main reasons for this is the mandatory covering of preconditions. This shifts the odds for the insurance companies and the only way for them to compensate will be to increase the cost of insurance. Don’t forget if the insurance companies cannot make money then there is no reason for them to stay in business, that is unless the government takes them over and delivers socialized medicine…

In a Wall Street Journal (WSJ) opinion piece, one of the nation’s top economists says more Americans would benefit from the health plan presented by presidential hopeful, John McCain, than that of his opponent, Barack Obama.  Robert Carroll, once a deputy assistant secretary for tax analysis at the US Treasury, bases his opinion on the refundable tax credit, proposed by McCain, compared to the current system, which provides a tax exclusion to help offset the cost of employer-based healthcare insurance coverage.

Carroll, now serving as vice president for economic policy at the Tax Foundation and as executive-in-residence for the School of Public Affairs for American University, expects the McCain plan to make insurance a possibility for as many as 15 million to 21 million currently uninsured Americans, although not all this new coverage will be employer based.

As an example of the McCain plan, a family of four pays $14,000 per year for healthcare insurance.  Regardless of the family’s income, it would get a $5,000 tax credit to help offset the cost of the policy.

Under the current plan, that same family is allowed a tax exclusion to offset the cost of the healthcare policy but the dollar amount of the exclusion fluctuates from family to family according to household income.  Under this plan, families earning about $25,000 and those earning $110,000 and up get the largest tax exclusions, roughly $4,250.

Under the McCain plan, the American approach to health care is expected to shift, with insurance coverage providing mostly for catastrophic care while the individual pays for routine medical exams and procedures.  Carroll says the current tax policy is biased unfairly against Americans wanting more comprehensive coverage for catastrophic illnesses but McCain’s plan will erase that tax bias.  He says the McCain plan will result in more Americans choosing insurance coverage that offers more services for catastrophic illnesses and with higher deductibles than the more generalized policies popular today with low deductibles that provide coverage for predictable medical costs.

Carroll feels McCain’s plan is important for keeping down the costs of the Medicare, Medicaid, and Social Security programs, which consume about 20% of today’s federal expenditures but which are expected to grow to 40% by 2040.  Carroll expects the tax credit from McCain’s plan to slow the growth of the Medicare and Medicaid plans more so than the demographic-driven Social Security program but McCain’s proposed tax credit, as well as other measures of the McCain plan, are expected to generate broad benefits well into the future.

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3 Responses

  1. This is not representative of the beliefs of most “top economists” as far as i can tell. The Wall Street Journal’s editorial page serves as a mouthpiece for its owner (Rupert Murdoch, also owner of Fox News). When he bought the WSJ he said that he would not touch the newsroom but that he would revamp the editorial pages. This “top economist” is ignoring key issues like the loss of employer based coverage for millions of Americans, a redefining of “coverage” that limits what insurance will pay for, and the increase in taxes to pay for the program. He does talk about “catastrophic insurance” becoming more popular, however he does not discuss that this leads to lower income people not being able to pay for check-ups, vaccinations, prescriptions, etc. This means that the cheapest insurance, the type that most newly insured would opt for, would not help people pay for the most common medical expenses. So if a person wanted to stay healthy, they would have more out of pocket expenses to do so, enough more that they would probably not be able to afford the catastrophic insurance anyway. McCain’s plan is a giant boon for the insurance companies, not helpful to most uninsured Americans. It also increases paperwork and bureaucracy. I do not know Mr. Carroll, but the overwhelming majority of “top economists” do not share his opinion.

  2. Average Todd,
    I never said it represented most of the top economist, but rather a top economist. As for the owner, irrelevant unless you have proof that the story was manipulated, your opinion of Murdoch has no bearing on it until you can prove that he had a hand in making this piece false.

    As for all of your concerns, the same can be said of Obama’s plan, the difference is how many people will have access verses how many currently do not have access. In addition to this the McCain plan is to lower the overall cost of insurance by opening up competition. Currently, the market is locked in geographically and prices are controlled via this method because insurance companies know their competition. This is hours of discussion, but you really should learn about how insurance companies actually work and the mechanism that drive pricing. The biggest issue which neither candidate has tackled is liability insurance. That is the main problem with healthcare costs and the only way to handle that is Tort reform and enforcement of drug patents when other countries set a price and if we do not comply threaten to produce their own copy of the drug in complete violation of the drug patents.

    To fix healthcare costs you have to go to the root of the problem.

    Yes there are other factors but these are the two main factors.

    As I said before this is an extensive area to cover and show all of the issues and discuss them equally, you need to really research it and not just on the net, go out and find out on the ground. Start at the bottom and work to the top.

  3. Thanks for the reply. Sometimes i feel like i am wasting my oxygen (pun intended) commenting on these blogs.

    One thing that I think it boils down to is that maximizing the collective health of our country may mean a break from traditional, unregulated markets. This may sound like a scary socialist idea, but its origins date back to some of the founders and icons of capitalism (Adam Smith, Teddy Roosevelt, now Alan Greenspan). The question, I guess, is whether we think that profit should have a place in healthcare or that profit should be the driving force behind healthcare.

    Tort reform and patent enforcement may be urgently needed but these things do not have the direct effects on patient premiums that you seem to believe. Healthcare recipients are not involved in defending against liability. Healthcare recipients are not involved in patent issues. I understand that all of these things are connected but efforts to provide healthcare to more individuals should not have to worry about the issue of other countries ripping off drug companies. That is a problem for the pharmaceutical companies and if people can get the drugs cheaper from Canada or Europe, that would be just fine for the average sick person. Patent law is business law and should dealt with as such, not included in healthcare reform. Having said that, i agree these are major problems.

    McCain claims that he will open up competition across state lines but this is not a good thing unless all states are playing by the same rules, which they are not. Some states require no coverage of mental health, reproductive health, prescriptions, etc. Sure, those programs will be the cheapest, but they will not lower total out-of-pocket to individuals who desire health, not just health insurance.

    As for Murdoch, he has claimed, repeatedly, that he wishes to use the editorial pages of the WSJ to put forth a set of ideals. He has made no bones about this when he bought the London Times, New York Post, and now the WSJ. I do not think this story was manipulated. I think, just as defense attorneys or cigarette companies find the one dissenting expert to testify, this is what Murdoch specializes in. I think that Carroll fully believes everything he writes. I do not think he is lying or attempting to put forth falsehood. I just think Murdoch publishes him because his minority view aligns with Murdoch’s desires. I don’t think Murdoch would disagree as he is a fantastic business man and does not consider himself a newsman.

    Finally, I don’t find Obama’s plan to be flawless. I can further say that if there were a plurality of ideas on the table, I would probably not support his plan at all. But given that we have to pick one of the two men (with a legitimate chance) running for President, i’ll go with the better of the two plans which is clearly (in my humble opinion) Obamas.

    You are right, this is a complex set of issues. I have spent time discussing drug issues with members of my family who work for pharmaceutical companies, medical issues with doctors and contributers to JAMA, hospital shortfalls with nurses at HUP in Philadelphia, and several professors at the University of Pennsylvania on issues ranging from medical history (Medical Apartheid by Harriet Washington) to medical ethics and nutrition.

    By the way, i don’t know if you caught this article in the NYT magazine but it is worth a read because it deals with health from a side of the problem not generally discussed. Michael Pollan makes a case for food policy having an enormous effect on health, economy, climate change, poverty, trade, etc. The health issue is also furthered in his books and NPR interviews which i think you can listen to for free. Kind of off topic, but related nonetheless.

    http://www.nytimes.com/2008/10/12/magazine/12policy-t.html?_r=1&scp=5&sq=nutrition+food+&st=nyt&oref=slogin

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