McCain's Health Care plan explained
From Yuval Levi at The Weekly Standard...
All American taxpayers, regardless of whether they now have health insurance or where they get it, would receive a $2,500 health care tax credit ($5,000 per family) under McCain's plan. If you now have health insurance through your employer and would like to keep it, you can do that and the economics of the arrangements would change only slightly, and (for all but the top 5 percent of taxpayers) for the better. The money your employer takes out of your wages for your insurance would be taxed, but the new credit would more than cover the additional taxes, leaving you with the insurance you have now, and with a little more money in your pocket at tax time (between $700 and $1,600, according to the estimates of the Tax Policy Center). Things don't change for your employer, and they get a little better for you....
If you now receive insurance coverage from your employer but are unhappy with it or would rather find coverage that stays with you through different jobs or better suits your family's needs on your own, the McCain plan would give you the same tax benefit for insurance you choose as you now get only for insurance your employer chooses. If you decline your employer's insurance, the portion of your wages spent on coverage becomes regular take-home pay, which you can use to buy insurance. The additional wages are taxed, but again the new credit would cover those taxes and even leave you with a little extra. You would have just as much money to spend on insurance as your employer did. In addition, the McCain plan would vastly increase the scope of competition in the individual insurance market by permitting insurers to sell policies across state lines. It would thus create both new buyers and new sellers and start to build a genuine individual insurance market, which would bring down costs.
Finally, if you don't have insurance at all now, the new tax credit would put your family $5,000 closer to affording it. Most of the uninsured are not poor (or else they would qualify for Medicaid), and for many families without coverage an extra $5,000 and a real market to buy in would make the difference and allow them to obtain health insurance. A recent analysis of the McCain plan by noted health care economist Roger Feldman and a team at Health Systems Innovation (HSI) found that it would reduce the number of uninsured Americans by 27 million--well over half of the present total--and all without forcing anyone who now likes their coverage to lose it.
While $5,000 doesn't sound like much for those with expensive, chronic conditions, there's an inexpensive medical coverage available called Catastrophic Coverage, that has a $5,000 deductible. That means it kicks in at exactly the place where McCain's Health Care Credits end.
Insure.com explains Catastrophic Coverage...
For example, in California a 25-year-old female could buy a major medical plan from Aetna for $86 a month, with a $5,000 deductible and 30 percent co-insurance after that, with an out-of-pocket maximum of $7,500 (including deductible).
Once there's more connection between the patients and the providers, overall medical costs will go down. Even now if you tell doctors and hospitals that you're "self-insured" they actually bill you less than they do the insurance companies.
Socialized health care will drive costs up farther, demanding higher taxes to pay for the soaring costs. Caps on costs will make service quality plummet and cost lives.
Posted by Danny Carlton at October 16, 2008 7:38 AM