John McCain's Healthcare plan as he discussed in the debate last night is a clear winner over his opponents Fannie May/Medicare type plan. First, anybody that thinks the government can run something this big, as the Obama plan would do, need only look at the current Fannie Mae/ Freddie Mac mess created by the Democrats. On a smaller level the Senate can't even manage their own cafeteria. It was millions of dollars in the red for the year before they finally outsourced it.
Highlights of John McCain's plan include:
- A $5,000.00 tax credit. What exactly does this mean? James C. Capretta spells it out like this:
Suppose a worker gets $50,000 in cash wages and $12,000 in health insurance.
Right now, he pays federal income taxes on the wages but not the health insurance. Let's assume, for reasons of simplicity, that the tax rate he is paying is a flat 25% on his wages. He therefore pays $12,500 in federal income taxes. His after-tax, after-health-care income is $37,500.
Now, under the McCain plan, his employer keeps paying the premium, which is now counted as income to the worker. He therefore pays federal income taxes on $62,000, or $15,500.
But he also gets a tax credit of $5,000 for health insurance, which means that, all in all, he owes $10,500 in federal taxes, or $2,000 less than he does today. His after-tax, after-health-care income is $39,500.
If the worker decides to buy his insurance in the open market instead of through the employer, the result will be the same. His employer is indifferent to how he pays his worker as long as total costs are the same. So instead of paying premiums, the employer pays his worker $62,000 in cash wages and does not pay anything toward insurance. The worker again owes $15,500 in taxes on this compensation, and he also must buy health insurance costing $12,000. So, his pre-tax income is $62,000, he owes $12,000 in health insurance premiums, and he owes $10,500 in federal taxes (after claiming his credit). His after-tax, after-health-care income is the same: $39,500 ($62,000 - $12,000 - $10,500), or $2,000 more than today.
- Gives people the choice, their choice for buying their insurance. They can choose to stay with the employers insurance coverage or go out and buy a plan on their own.
- Create more competition in the healthcare market to reduce costs and increase quality by opening up state borders so that you can get your insurance from the best source for you.
The Obama campaign doesn't want you to understand all of this because it makes sense. They have come out with an entire series of ads that take certain parts of the plan and distort or create lies about it. They are afraid that if people understand McCain's plan they will lose.
The truth is that under the McClain plan people will have more reliable, affordable and portable coverage than ever before. The additional benefit will be that most will end up with more money in their pocket.
Yuval Levin, a fellow at the Ethics and Public Policy Center says: There is no question that part of the aim of the McCain plan is to build a more functional non-group insurance market so as to slowly and gradually sever the link between employment and insurance. That would help make health insurance more portable and reliable, and allow people to feel secure about their coverage regardless of changes in their employment and their lives. The insecurity of employer-provided coverage is one of the chief problems bedeviling American health care and the middle class, and McCain's proposal would help address it without creating a powerful incentive to push people into government run insurance - as Obama's plan would do. Biden's deceptive description notwithstanding, that is an important part of the appeal of the plan, from the point of view of both the average American family, and the broader American economy.
If healthcare is one of your big concerns, you need to vote for John McCain on November 4th.