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Cost And Coverage Implications Of The McCain Plan To Restructure Health Insurance
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| Contributor | RP |
| Last Edited | RP Sep 17, 2008 10:56pm |
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| Category | Analysis |
| News Date | Wednesday, September 17, 2008 04:00:00 AM UTC0:0 |
| Description | Senator John McCain's (R-AZ) health plan would eliminate the current tax exclusion of employer payments for health coverage, replace the exclusion with a refundable tax credit for those who purchase coverage, and encourage Americans to move to a national market for nongroup insurance. Middle-range estimates suggest that initially this change will have little impact on the number of uninsured people, although within five years this number will likely grow as the value of the tax credit falls relative to rising health care costs. Moving toward a relatively unregulated nongroup market will tend to raise costs, reduce the generosity of benefits, and leave people with fewer consumer protections.
In public opinion polling, both democrats and Republicans rate health care as a key domestic issue in the upcoming election. Health care policy was an important issue in the Democratic primary races, and many voters are familiar with the outlines of the plan proposed by Sen. Barack Obama (D-IL). Less attention has been paid to the health care proposal of John McCain (R-AZ), the Republican nominee. In this paper we describe the likely impacts of the McCain plan on the level and stability of insurance coverage and on the health care costs faced by families.
Senator McCain's health plan has three central features: withdrawing the current tax exclusion of employer payments for employer-sponsored coverage (in other words, taxing premiums paid by employers), introducing a refundable individual health insurance tax credit, and deregulating nongroup insurance by permitting the purchase of policies across state lines. We focus on the effects of these features here. Senator McCain's plan also contains other elements, including the promotion of disease management, information technology (IT), medical liability reform, and pricing transparency, but details on these elements have not been released, and space limitations preclude us from considering them here. |
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