Mccain’s Health Plan Offer’s Tax Credit For Health Insurance To Everyone
McCain’s health care plan would eliminate the tax deduction for health care plans, and replace it with a “refundable” tax credit for everyone.
Here’s what it means:
Right now, group health insurance benefits are exempted from tax, which means you don’t pay taxes on the value of the health insurance thought you receive from your employer (assuming you are among the fewer and fewer citizens who detached receive health insurance benefits from your employer).
Under McCain’s view, that exemption would disappear. You would be taxed on the value of your health insurance benefits.
In return, he would offer you a tax credit at a fixed, universal value. It would be the same for everyone. And everyone — the theory goes — could go out shopping to seize their absorb health insurance on the open market. In theory, as “consumers” hit the “market” for insurance, competing companies would lower prices, improve their coverage, and give better service and benefits overall.
Sounds expedient.
It would be, if insurance and health services worked in the same map the market for cars works.
A group of four well-respected scholars have concluded in a new white paper that McCain’s problem would result in less and worse health insurance coverage. Here’s why:
First, insurance companies who sell group plans cannot exclude individuals from the group plans. When a company hires someone with diabetes, and that person comes under the company’s purchased health insurance plan, the insurance company can’t legally exclude the unusual employee with diabetes. As anyone knows who has tried to buy health insurance individually, insurance companies can and do exclude individuals who have chronic health problems.
That defeats the purpose of health insurance — unless you acquire that the purpose of health insurance is to make money for insurance companies.
A second problem is that McCain’s proposed tax credit is structured to maintain up with the rising costs of health insurance. Free market proponents may argue that health insurance, and necessarily health care costs themselves, would decrease rather than increase under a McCain thought. Supply and quiz, they would argue. Competition in the marketplace. But they would find no serious policy experts to agree with them.
To the contrary, policy experts tend to agree that a typical “consumer” approach to health care and health care insurance does not work on a supply-demand principle. Common sense backs them up. The diabetes patient who is denied coverage, or who is offered coverage at an unaffordable trace, can tell you that no matter how much “demand” she may feel for the medical treatment necessary to keep her healthy, she cannot find a realistic “supply.”
The white paper abstract sums it up in this way:
Moving toward a relativelyunregulated nongroup market will tend to raise costs, reducethe generosity of benefits, and leave people with fewer consumerprotections. [Health Affairs 27, no. 6 (2008): w472-w481 (publishedonline 16 September 2008; 10.1377/ hlthaff.27.6.w472)]
The authors of that picture are not political hacks. And they have criticized the Obama health care belief as well. So you’ll have some context in which to deem the foregoing quotation, I’ll paste in here the names and credentials of the four scholars who authored the study:
1 Tom Buchmueller is the Waldo O. Hildebrand Professor of Risk Management and Insurance in the Ross School of Business, University of Michigan, in Ann Arbor.
2 Sherry Glied is a professor and chair of the Department of Health Policy and Management, Mailman School of Public Health, Columbia University, in New York City.
3 Anne Royalty is an associate professor of economics, Indiana University–Purdue University at Indianapolis (IUPUI).
4 Katherine Swartz is a professor of health economics and policy in the Department of Health Policy and Management, Harvard School of Public Health, in Boston, Massachusetts.
Corporate employees and others who may still enjoy group-based health insurance plans stand to lose the most. They’ll lose the tax exemption for those plans. Instead they’ll be given a tax credit and an intimidating homework assignment: go out and find yourself a good deal on health insurance. By yourself.
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Filed under usaa car insurance by on Jan 27th, 2012. 
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