Campaign Of Presumptive GOP Presidential Nominee McCain Says His Health Plan Might Require Higher Taxes For Some

Main Category: Health Insurance / Medical Insurance
Also Included In: Public Health
Article Date: 02 May 2008 - 10:00 PDT

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The health care proposal detailed on Tuesday by presumptive Republican presidential nominee Sen. John McCain (Ariz.) could increase taxes for some higher-income individuals and families, his campaign said on Wednesday, the New York Times reports. The proposal would replace a tax exemption for employees who receive health insurance from employers with a refundable tax credit of as much as $2,500 for individuals and $5,000 for families for the purchase of private coverage, which McCain maintains would promote competition among health insurers, reduce costs and improve quality.

However, the increase in taxes that would result from the elimination of the exemption might exceed the amount of the tax credits for some higher-income individuals and families. According to McCain chief policy adviser Douglas Holtz-Eakin, individuals in the highest income tax bracket with family health insurance whose employers contribute at least $14,285 toward premiums would have to pay more in taxes. Nationwide, family health insurance premiums total an average of $12,106, and employers contribute an average of $8,824 toward those premiums, according to the Times.

The "change would primarily affect those with gold-plated insurance policies," according to the Times, and health care analysts "point out that middle-income workers with conventional coverage could conceivably pay more in regions where insurance costs are high." The Times also notes that who is affected with higher taxes "might depend on how the tax credits are adjusted for inflation, a detail Mr. McCain has not discussed."

Gary Claxton, a vice president of the Kaiser Family Foundation, said that the employers of about 6% of individuals contribute at least $14,285 toward family health insurance premiums, but he did not estimate the number of those individuals in the top tax bracket and who would have to pay more in taxes under the McCain proposal (Sack/Cooper, New York Times, 5/1).

McCain in Pennsylvania
As part of his "tour of America's health care system," McCain on Wednesday discussed his health care proposal with more than 200 staff members at the Lehigh Valley Hospital in Allentown, Pa., the Philadelphia Inquirer reports. During the visit, McCain cited the cost of health insurance for individuals with chronic diseases who cannot afford private coverage as the largest challenge for expansion of coverage to all U.S. residents. He said that he would work with governors and state legislatures to develop a proposal to help those individuals.

On Thursday, McCain plans to visit the Cleveland Clinic in Ohio to discuss his proposal (Infield, Philadelphia Inquirer, 5/1).

A webcast of McCain's remarks in Pennsylvania will be available online later today at health08.org.

Column Examines Health Care Proposals
McCain and Democratic presidential candidates Sens. Hillary Rodham Clinton (N.Y.) and Barack Obama (Ill.) "are laboring with understandable vigor to contrast" their health care proposals, but, "in some key areas, the two sides are inching ... toward the middle of the ring, a change that's a necessary step toward getting something done," David Wessel writes in his Wall Street Journal "Capital" column. At a Washington, D.C., forum this week, Len Nichols a "veteran of the failed Clinton health initiative of the 1990s," and Joseph Antos, a Republican economist at the American Enterprise Institute, "each ticked off some virtues of the other side's plan," according to Wessel.

McCain would replace the tax exemption -- which is "worth much more to high-bracket taxpayers than low-bracket taxpayers, and worth nothing" to individuals without health insurance -- with tax credits, which would benefit "every family, no matter what their tax bracket or where they get insurance," Wessel writes, adding, "Take from the rich, give to the bottom half, a Democratic applause line." Meanwhile, Wessel writes, Clinton and Obama "have moved toward Republicans in proposing to subsidize individuals so they can shop for insurance," and they have focused on the "virtues of people choosing from among competing health plans."

However, Wessel writes, "There's still plenty to argue about." He concludes, "The moment of compromise isn't at hand," but "behind the rhetoric, there's a movement" (Wessel, Wall Street Journal, 5/1).

Opinion Pieces
Two opinion pieces related to health care issues in the presidential election appear below.

• Kristen Running-Marquardt, Des Moines Register: The McCain proposal would "make it harder to get health insurance," Running-Marquardt -- director of Iowa for Health Care, part of the Americans for Health Care project sponsored by the Service Employees International Union -- writes in a Register opinion piece. As health care costs increase, "more and more businesses are declining to offer health coverage to their workers because they are being priced out of the market," and McCain "would make this problem even worse" through the elimination of the tax exemption for employers, Running-Marquardt writes. She adds, "McCain's health care plan would transfer the burden of unaffordable health care costs from the employer to working families." In addition, the proposal would allow health insurers to "cherry-pick" the healthiest individuals and charge unaffordable premiums or deny coverage to those with pre-existing medical conditions, according to Running-Marquardt. She writes, "There is simply no way that families will be able to afford coverage" (Running-Marquardt, Des Moines Register, 5/1).
  
  
• Rick Martinez, Raleigh News & Observer: None of the candidates "is really discussing the health care reform we need," contributing columnist Martinez writes in the News & Observer. According to Martinez, the candidates are "talking only about health insurance and who pays for it," and, regardless of whether the next president "implements a plan that gets everyone covered, it's doubtful our health care woes will be solved." He writes, "Clearly, insurance coverage is not the most critical health care problem we face," adding, "It's the unrestrained costs." Health care costs are "rarely, if ever, a factor considered by patients," but they "should be, even in the most critical cases," Martinez writes. He writes that health care is a "complicated issue that won't be cured by a single presidential diagnosis," adding that his "support will go to the candidate who sees the informed patient as an integral part of the cure, instead of a symptom to be treated" (Martinez, Raleigh News & Observer, 4/30).

Broadcast Coverage
CNN's "Larry King Live" on Wednesday included a discussion with filmmaker Michael Moore about the health care proposals of the presidential candidates and other election issues (King, "Larry King Live," CNN, 4/30).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

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