If you're among the millions of Americans lucky enough to have health insurance through your job, you should beware John McCain. He wants to tax the health insurance benefits you get from your employer.
Here is how Business Week describes McCain's proposal:
"McCain wants to do away with the tax exemption on employer-provided insurance ... McCain's plan is meant to encourage individuals to purchase their insurance and free companies from the heavy cost of providing coverage."
Instead, McCain would offer you tax credits for health insurance. If you're not happy with the coverage your employer offers, or your employer decides to quit offering health insurance, you'd go out and buy your own.
McCain would give individuals a $2,500 credit per year. Families could get $5,000. That's a lot -- but it's less than half the $12,000 a year that family health insurance coverage costs, according to the Kaiser Family Foundation.
McCain pitches his plan as a way to cut costs by promoting "consumer choice" and "competition."
He thinks health insurance companies will cut prices for coverage, because they'll be competing to win over all those new customers. McCain thinks you'll drive a harder bargain on prices with doctors and hospitals because you'll be spending more of your hard-earned money.
Good luck with that.
If you love dealing with your health insurance company now, imagine how delighted you'll be when you are left to hassle with a distant health insurance company all by yourself, with no help from your employer or human resources department.
Because you can pretty much count on losing your health coverage at your job. That's the prediction from Fortune magazine, in a review of McCain's plan posted on CNN's Web site. With McCain's plan, editor-at-large Shawn Tully says, "The raison d'etre for corporate health benefits would vanish." Making you pay taxes on your health insurance benefits, he writes, would be a "compelling reason (for employers) to pass the ball to the employee." Fortune's review quotes a benefits consultant, Robert Laszewski, who says "I predict that most companies would stop paying for health care in three to four years."
When that happens, McCain and the free-market supporters of his plan presume employers would raise your salary by the full amount of the health insurance premium they no longer pay for you. (If you believe that, there's a Nigerian businessman who would like you to join him in a lucrative, no-risk proposal. Just check your e-mail.)
McCain's plan would leave you with less purchasing power while throwing you to the mercy of dealing with health insurance companies. Who do think would do a better job of negotiating with a health insurance company -- you or your employer? There's a reason health insurers are about as popular as used car salesmen.
Under McCain's approach, workers with expensive pre-existing conditions, or high-risk health histories, would pay a lot more -- if they can even get coverage at all. He offers them a vague promise of working with governors to develop state-level insurance pools for high-risk customers.
McCain would also let health insurance companies go trolling for customers across state lines, free from regulation in your home state. The country saw how great that approach worked when it comes to home mortgages.
McCain's plan "might sound good to free marketeers," says Larry Weiss, editor of Alaska Health Policy Review. "But in terms of making health care accessible to real people, I think it's a fraud."
The U.S., Weiss notes, is alone among industrialized countries in relying so heavily on private health insurance supplied through the workplace. The result? We spend more per citizen on health care than any other advanced country and we have the lowest life expectancy.
No question, there's lots of room for improvement in the U.S. health care system. But McCain's proposal -- giving more money and clout to health insurance companies -- moves the country 180 degrees in the wrong direction.
BOTTOM LINE: John McCain's health care plan would make an inefficient and expensive system even worse.