April 30, 2008 in Nation/World

McCain says market is best fix for health care

Michael D. Shear Washington Post
 
Associated Press photo

Sen. John McCain, R-Ariz., talks to doctors, nurses, scientists and health care workers Tuesday in Tampa, Fla. Associated Press
(Full-size photo)

Plan redirects tax breaks

Central to John McCain’s health care plan is a shift away from job-based coverage to an open market where people can choose from competing policies. McCain would offer families a $5,000 tax credit to help buy insurance policies. Everyone would get the credit, whether he or she keeps a policy through an employer or shops for a new one. The credit would be available as a rebate to people at lower income levels who have no tax liability.

Associated Press

TAMPA, Fla. – Sen. John McCain on Tuesday rejected calls by his Democratic opponents for universal health coverage, instead offering a market-based solution with an approach similar to a proposal put forth by President Bush last year.

McCain’s belief in the power of the free market to solve the nation’s health care needs sets up a stark choice for voters this fall, in terms of the health care they could receive, the role the government would play and the importance they place on the issue.

Democratic Sens. Barack Obama and Hillary Rodham Clinton have vowed government action to correct what they cast as a moral right for Americans to have health insurance. They favor mandates for coverage; McCain proposes tax incentives. Obama and Clinton would impose new regulations on insurers; McCain’s plan is designed to avoid direct regulation. The Democrats would build on the current employer-based system; McCain would shift to a more individual approach.

In a speech at a cancer research center here, McCain dismissed his Democratic rivals’ proposals for universal health care as riddled with “inefficiency, irrationality and uncontrolled costs.” He said the 47 million uninsured Americans will only get covered when they are freed from the shackles of the current, employer-dominated system.

McCain’s prescription would seek to lure workers away from their company health plans with a $5,000 family tax credit and a promise that, left to their own devices, they will be able to find cheaper insurance that is more closely tailored to their health care needs and not tied to a particular job.

Under McCain’s plan, $3.6 trillion worth of tax breaks over a decade that would have gone to businesses for coverage of their employees would be redirected to individuals, regardless of whether they are covered by a company plan.

Health experts predict a robust debate once the general election begins, as growing anxiety about the cost of health care plays out against a backdrop of a worsening economy, higher gas prices and rising unemployment.

McCain’s proposal is similar to one Bush put forth in his 2007 State of the Union address. That plan, which would have replaced employer tax breaks for health insurance with a $15,000 tax deduction for married couples, flopped in Congress, failing to even get a committee hearing.

McCain’s plan is aimed primarily at giving individuals the right to make health care decisions, by granting the same tax breaks for insurance whether a person gets their policy from an employer or on their own. Aides call it a “radical” rethinking of health care that will drive costs down and give people more choice.

But it also leaves McCain open to the criticism that he is not doing enough for the poor and sick, who could face steep premiums and limited choices as they search for an insurance company willing to cover them. Critics of McCain’s plan said it will do little to help people already struggling with health care costs.

Unlike his Democratic opponents, for instance, McCain would not mandate coverage for people with pre-existing conditions who have not already been covered by a company health insurance plan. Critics say that would leave millions of people without coverage.

“Our next president has to get health care costs under control. But like President Bush, John McCain won’t stop rising health care costs,” asserts the Service Employees International Union, which has endorsed Obama, in a new television ad running throughout the swing state of Ohio. “But when it comes to making health care affordable? We’ll still be feeling the pain.”

McCain on Tuesday sought to answer those charges by saying he would create what he called a Guaranteed Access Plan – or GAP program – to help provide coverage of last resort for the sick and other “high-risk” people until the marketplace has matured enough to take care of them.

He gave few details of how such a program would work, who would run it, or how it would be financed. He said it might be operated by a nonprofit organization with funds from the federal and state governments. And he said he would work with governors to solicit ideas from their experiences with similar state-run programs.

McCain advisers said such a program could cost as much as $7 billion a year. But McCain vowed not to “create another entitlement program that Washington will let get out of control. Nor will I saddle states with another unfunded mandate.”

In a statement, Clinton said McCain’s plan has “fundamental flaws” and charged that it would abandon millions of Americans to expensive, high-risk insurance arrangements. “Older Americans or those with pre-existing conditions would be allowed to get only one type of coverage in a high risk GAP pool,” Clinton said. “That kind of arrangement does more to help insurers than individuals.”

Obama spokesman Hari Sevugan said “John McCain is recycling the same failed policies that didn’t work when George Bush first proposed them and won’t work now.”


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