Wall Street Journal: McCain’s Health Care Plan Best for Almost Everyone

According to Robert Carroll of the Wall Street Journal, McCain’s health-care insurance tax credit proposal is most misunderstood but “Almost Everyone Would Do Better Under the McCain Health Plan.”

Carroll goes into some detail explaining how the actual McCain proposal contradicts Obama’s statements about it, because the plan “exceeds the value of the current exclusion for all income levels shown.” The plan would provide more resources for the purchase of health insurance than the existing, or current, exclusion and the total subsidy for health care “would rise from about $3.6 trillion over 10 years today to roughly $5 trillion under his proposal.” According to some of the nation’s top economists in the Treasury Department's Office of Tax Analysis and estimates by the respected private health-care research firm, The Lewin Group, the McCain credit would increase the number of insured by 15 to 21 million. The objective of the McCain proposal is to reduce the current tax bias that encourages people to funnel routine health expenses through insurance policies.

It is much more likely to be a plan with higher deductibles that is more focused on providing true insurance against catastrophic losses rather than a more generous plan that includes a lot of prepayment for routine and predictable medical expenses.

Carroll, vice president for economic policy at the Tax Foundation, writes that McCain’s Health Care plan will be good for the economy due to the most important aspect of the proposal. The unchecked massive unfunded liability associated with the entitlement programs of Social Security, Medicare and Medicaid will “double the size of the federal government by 2040, consuming roughly 40% of the nation's output rather than the 20% today.” The elimination of the income-tax exclusion would reduce private health-care spending and “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.

Kevin Sack, of the New York Times, writes “Businesses Wary of Details in Obama Health Plan.” Obama’s Health Plan to provide affordable coverage for the uninsured by subsidize coverage for the uninsured through the taxing of employers who do not cover their workers is causing many to have doubts. Health experts and economists believe that Obama might have to require medium to large companies to contribute as much as 6 percent of their payrolls! This could be catastrophic to smaller or low-margin businesses. Obama has failed to release details of his plan so far. Obama has indicated that the “smallest businesses” might be exempted, but so far he has not defined what size firms would be exempted, nor has he defined the penalty for non-compliance despite McCain’s "badgering" Obama about it in two debates. Obama’s health care spokesman, David M. Cutler, explained the failure to explain the plan in more detail.

“It’s not that there’s a decision out there that we’re not telling. It’s literally that we’ve decided not to decide.”