$5000.00 for Health Insurance

Republican presidential candidate John McCain has proposed a new tax credit that would change how many people get their health insurance. McCain said Tuesday he would offer families a $5000.00 tax credit to help buy health insurance. The proposal would supposedly allow workers greater choice in their health coverage. Everyone would be eligible for the new tax credit. Taxpayers could claim the credit whether they continue their health insurance through an employer based plan or if they purchase their own policy. Tax credits are applied directly to the taxes owed and any excess credit would be a refund to the taxpayer. Employers would still be able to deduct expenses for the part of employee plans they contribute to.

Three major concerns arise from this announcement:

• First, that employers might stop offering health plans to their employees.
• Second, that a cessation of employer-based plans will force people with preexisting conditions out of coverage.
• Thirdly, that offering such a credit will spark a rise in insurance premiums so that the insurance industry can capture the entire $5000.00/year from each taxpayer.

McCain's proposal is nebulous at this time, but he responds that concerns about preexisting conditions will be covered and safety-nets will ensure that all workers will be able to obtain health insurance within the proposed program. The McCain camp was less clear about how the program will safeguard against the cutting of employer plans and the potential for the insurance industry to abuse the tax credits of consumers.

Of course both Democratic candidates, who are promoting different forms of supposedly "universal" coverage that would have to be paid for with federal tax dollars (which means higher taxes!) and downplayed McCain's proposal.

• Have you heard of this proposal?
• What do you think about this health/tax plan?
• Would such a health plan be beneficial for you and your family?