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Presidential Politics: More on the McCain Healthcare Reform Plan

Written by on Thursday, May 1st, 2008 Print This Post Print This Post

McCain set out more details this week on his healthcare reform plan; while the plan contains some new features, it falls short of providing any comprehensive plan that would really resolve the country’s healthcare woes.

Marketwatch reported on McCain’s plan as follows:

McCain espouses some ideas that have broad bipartisan appeal: the use of generic drugs; incentive pay for doctors and hospitals that achieve good health results; and electronic medical records to reduce wasteful spending. But several of his proposals, such as changes in the tax treatment of employer-sponsored coverage, raise more questions than he seems prepared to answer. . . .

Tax credits that encourage the purchase of individual health insurance form the centerpiece of McCain’s health plan, and would be a dramatic departure from the way health insurance is distributed today. . . . McCain proposes to give refundable tax credits of $2,500 for individuals and $5,000 for families to offset the cost of coverage in exchange for eliminating tax breaks that employees and employers currently have. If you get your coverage through a job, gone would be the tax exclusion that allows your premium dollars to come out of your pretax pay. He argues that would level the playing field for people who don’t get their insurance through work while preserving choice — you could take that money and keep your employer plan or use it to buy one on the individual market. . . .McCain also wants to allow people to buy health insurance across state lines. . . .

[H]e wants to create a Guaranteed Access Plan “that would reflect the best experience of the states” and function as a health insurer of last resort, kind of like the high-risk pools 30 states have set up.

While some of McCain’s plans make sense such as the idea of being able to carry insurance across borders and having a Guaranteed Access Plan, his focus on encouraging individual plans fails to address the issue of how people with minor health problems will get coverage as individuals.  The reality is that many Americans would have no other option but to go with the Guaranteed Access Plan: how exactly would the U.S. fund such a plan?  Obviously, if businesses no longer receive tax benefits for the payment of premiums, it will become increasingly difficult for such business to justify offering their employees such benefits.

Another problem: how would insurance across state lines be regulated?  I am completely in favor of the idea, as I had terrific insurance when I lived out of state and was sorry to lose it when I moved to California; however, in a multi-state model, it seems likely that a new federal entity will be needed to provide oversight over the regulation of insurance in all of the states.

All in all, while Americans should be happy to see that McCain has a health care reform plan, they may be disappointed to see that his plan has no groundbreaking solutions–certainly none that will resolve the current system’s problems.  Is this really a surprise though?  Unfortunately,  we remain a long way from electing anyone who can really  resolve all of health care’s problems.

Attached is a copy of McCain’s speech on healthcare in full.

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