McCain's $5,000 Promise

His new ad only tells half the story of what his health proposal could mean for U.S. workers.

Apr 30, 2008 | Updated: 6:02 p.m. ET Apr 30, 2008

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Summary
McCain says in a new TV ad: "Let's give every American family a $5,000 refundable tax credit" to buy health insurance.

Sounds good. But McCain failed to mention how existing employer-sponsored health benefits would be affected.

• Workers would be taxed on the value of any employer-paid health benefits, partially offsetting the $5,000 credit for those now covered by such plans.

• Experts say a tax credit plan like this would likely cause companies to reduce or eliminate health benefits for their employees.

The aim of the McCain plan is to reduce health care costs through increased competition, by encouraging individuals to shop around for health insurance and medical care. There are many who favor such an approach, and we take no position on it one way or the other. But McCain's simplistic ad misleads viewers by promising to give "every American family" a $5,000 benefit while failing to mention what he would also take away.

Analysis
Sen. John McCain's ad was released April 29 and will air in Iowa.

Who Benefits?
John McCain 2008 Ad: "Health Care Action"

John McCain: The problem with health care in America is not the quality of health care, it's the availability and the affordability. And that has to do with the dramatic increase in the cost of health care. Let's give every American family a $5,000 refundable tax credit so that they can go out across state lines and get the insurance policy that suits them best. I can characterize my approach on health care by choice and competition, affordability and availability. We need community health centers. We need walk-in clinics. We understand that emergency room care is the most expensive in America. There's many, many solutions to this problem. I think we can address them. The fundamental problem is not the quality of health care; it's the cost of health care. So health care must be made affordable and available. I'm John McCain and I approve this message.

In the ad, he says the problem with health care is not the quality, but the cost. As a remedy, he promises "every American family a $5,000 refundable tax credit" so families can purchase their own insurance policies. (Individuals would receive $2,500.) The federal government would send the money directly to insurance providers.

Member Comments

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Posted By: bruciejo @ 05/03/2008 12:41:03 PM

Let's all pick on insurance ompanies!! They control costs though underwriting!! Most companies carry 1/2 the cost of healt premiums -- with Cobra the departing employee picks that up in addition to threir payroll deducted premium!! Minnesota has a state pool for uninsurable-- and can't afford the claims!!
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Posted By: bruciejo @ 05/03/2008 12:40:51 PM

Let's all pick on insurance ompanies!! They control costs though underwriting!! Most companies carry 1/2 the cost of healt premiums -- with Cobra the departing employee picks that up in addition to threir payroll deducted premium!! Minnesota has a state pool for uninsurable-- and can't afford the claims!!
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Posted By: OldUncleTom @ 05/02/2008 9:56:07 PM

Nodoby ever asks if the problem here is INSURANCE, not the cost of health care. Insurance companies NEVER lose. They also have little incentive to control costs, as they simply pass on increases to the rate-payers. Does the consumer have a choice? Not much, as it is difficult even for healthy people to change plans, once established within the system.
My personal preference: HSA with a catastrophic major medical policy to back it up. Perhaps coupling that with a zero-based medical care deduction on taxes, not one which requires a minimum percentage of income to deduct. To be fair, eliminate cosmetic and other optional procedures.
The most important thing to me is to break the "nobody pays" cycle that hides waste and unnecessary medical procedures. The truth is, SOMEBODY pays, and that "somebody" is all of us, in the form of premiums.