John McCain will tax your health care. Sounds perverse, doesn't it? He's calling for treating employer-based health care as part of income–a tax increase of $2,000 to $3,000 per family.
Of course, that's not the end of the story. McCain will give every family a $5,000 tax credit to help pay for insurance that they negotiate individually with the insurance companies.
What we have here is a clear statement of the choices that face Americans–and of the failed philosophy that has gotten us into such a mess.
Most Americans get health insurance from their employers. You pay part of the cost; the employer picks the plan or plans. That benefit is not included in your income, so you pay no income taxes on it. It is a tax-free benefit.
But as the costs of health care have gone up, more and more employers have been passing more of the costs onto employees–or have been forced not to offer health insurance at all. So more and more Americans either go without insurance or are underinsured, one serious illness away from bankruptcy.
Meanwhile, rising health care costs are threatening to bankrupt nearly everybody: families faced with higher co-pays and deductibles, along with businesses and state and local governments. Even at the federal level, the entire long-term debt problem of the U.S.–at least before the Bush administration added a trillion dollars to it by bailing out the banks–is the projected cost of health care. Something must be done.
Conservatives like John McCain offer one course. They would accelerate the unraveling of employer-based health care; that's why they would tax it. And experts estimate that some 20 million employees are likely to lose employer-based benefits under their plan. Then they'd subsidize individuals to negotiate their own insurance. And they'd deregulate insurance companies so they could compete across state lines without limits. The theory is that, faced with making their own decisions, Americans would be more cost-sensitive than companies are. And the competition would help limit cost increases.
The problem with this course is that many will fare much worse. If you are already sick–have a "pre-existing condition"–the cost of your insurance will soar, or you won't be able to buy insurance at any price. And for many Americans, sorting through the blizzard of plans and price schedules, the changing list of doctors and treatments covered would be a nightmare.
Progressives like Barack Obama are offering a different course. They would give you a secure choice. Keep your employer-based insurance or buy into a public plan like that enjoyed by members of Congress. Regulate insurance companies so that they must cover those with pre-existing conditions. Then capture cost savings by focusing on preventive care, exercise and diet, and administrative reform–particularly, computerizing records to reduce the massive paperwork you see in doctors' offices.
The theory is that the public plan–without the need to rack up profits, pay soaring CEO costs or spend the money insurance companies spend trying to avoid insuring those who are sick–will offer more care for a lower price. Over time, more and more employers and employees might choose that plan, spreading the risk by increasing the pool of those covered.
McCain and his conservatives scorn this as government-controlled health care. McCain promises to deregulate health care as we have deregulated banking. Of course, that was before the banks imploded. It doesn't seem like such a good idea today.
In just three weeks, you get to decide. Which direction seems best for you?