Robert Carroll has a must read Op Ed on John McCain’s health care plan in today’s Wall Street Journal. Carroll does and excellent job of explaining what may be the single most misunderstood and misrepresented proposal of this election… The bottom line is most of us would do better under McCain’s health insurance tax credit.
Almost Everyone Would Do Better Under the McCain Health Plan
His tax credit is larger than the current tax subsidy for insurance.
By Robert Carroll, Wall Street Journal, October 27, 2008
Still, some 45 million Americans are uninsured; and the growth in health-care spending continues to outpace the growth in incomes and the economy, which portends further increases in the number of uninsured. The employer-based system itself is eroding. Voters should be wondering whether there is a better approach than this subsidy.
What many may not realize is that the federal government already “spends” roughly $300 billion to $400 billion through the tax code to encourage people to pay for their health care through employer-sponsored health insurance. This subsidy takes the form of the exclusion for employer-sponsored health insurance from both income and payroll taxes.
There has been a lot of rhetoric and misstatements, but what exactly does Sen. McCain have in mind? He would replace the current income tax exclusion for employer-sponsored health insurance with a refundable tax credit — $5,000 for those who purchase family coverage and $2,500 for individual coverage. Mr. McCain would also reform insurance markets to stem the growth in health insurance premiums. Read the rest…