In his column Tuesday, New York Times columnist Bob Herbert peered into John McCain’s health plan, something we have been urging mainstream media to do for some time now. “Has anyone bothered to notice the radical changes that John McCain and Sarah Palin are planning for the nation’s health insurance system?” Herbert asked, before explaining that McCain wants to require workers to pay taxes on the value of the health benefits paid by their employers. In other words, employees will not only continue to pay part of the escalating premiums, but also a tax on the benefits.
In return, McCain would give families a $5,000 tax credit and individuals a $2,500 credit to lure them out of their employers’ plans and into the individual insurance market, where prices are super high and scrutiny of health conditions is tough.
McCain announced his plan at the end of April, but the media have largely ignored the tax increase part. Instead, they have causally reported that he would give a tax credit, often without mentioning the shortcomings of that approach: that the credit may not buy much coverage, given sky high premiums; that it is worth a lot more to younger workers than older ones who pay more because of their age; that it might eventually destroy employer-based coverage. Without the explanation, his plan sounds soooo benign and palatable.
So kudos to Herbert for using his large megaphone to tell the public what’s really going on here. Herbert also deliberately connected the consequences of destroying the employer market with McCain’s plans for the individual market, observing that McCain wants “to undermine state health insurance regulations by allowing consumers to buy insurance from sellers anywhere in the country.” We made this point last month, noting that allowing insurers to cross state lines is unlikely to lower the price of insurance and, instead, will eliminate the valuable protections some states have given their residents.
A study published today in the health policy journal Health Affairs fleshes out what is likely to happen. Its conclusions: the number of people without health insurance will actually grow over time, and McCain’s proposal will actually increase a family’s costs for medical care. Hmm—that’s just the opposite of what we’ve heard from campaign rhetoric. Maybe, just maybe, the media will now take notice.