Yesterday, Rep. Michael Burgess (R-TX), the architect of Sen. John McCain’s (R-AZ) health care plan, falsely claimed that McCain’s health reforms would come closer to insuring every American “than will Senator Obama’s.”
CLAIM: McCain’s plan “comes a lot closer to the ideal goal of offering every American the opportunity for insurance.”
FACT: McCain’s plan would not come close to insuring the 47 million Americans without health care.
– By equalizing the tax treatment of employer and individual plans, McCain would entice healthy workers to buy cheaper but less substantive insurance in the individual market place. The exodus of healthier workers from employer-pools would increase the average health care costs for sicker employees who can’t find coverage in the individual market, forcing them to opt out entirely.
– As the Center for American Progress Action Fund pointed out, the entire employer health insurance system could unravel, “ending this as an option for Americans who prefer it.”
CLAIM: Under McCain’s plan the uninsured would be able to purchase insurance because “the employer can provide…additional compensation to in a employee over and above the $5,000 tax credit that that employee could use to purchase insurance for themselves or family.”
FACT: Average premiums are higher than McCain’s credit of $2,000 for an individual and $5,000 for a family.
– According to the Kaiser Family Foundation, “the average annual premium costs for a family with employer-sponsored insurance was $12,106 in 2007, and it was $4,479 for a single person.”
– Annual premiums for nongroup coverage vary widely, currently ranging from $1,163 to $5,090 for singles, and $2,325 to $9,201 for family coverage.
FACT: McCain’s plan is a tax increase.
– While McCain’s credit may assist a limited number of families who currently lack any kind of health insurance, workers who receive a higher tax subsidy through employer-based plans would experience a tax increase.
FACT: McCain’s credit will diminish in proportion to growing health premiums.
– The individual consumer would have to stretch McCain’s tax credit to cover the ever-growing costs of medical premiums. This is because McCain indexes the growth of his initial $5,000 offering to inflation, not premiums. And, since premiums grow at a higher rate than inflation, McCain’s proposal imposes $3.6 trillion tax increase on the consumer.
FACT: McCain’s plan gives employers an incentive to drop coverage once the tax credit is available.
– By equalizing the tax treatment of employer and individual plans, it makes individual plans more attractive than they are today. Business owners would no longer need to cover their workers to get tax benefits for their own coverage.
During the interview, Burgess admitted, “I don’t know a great deal about Sen. Obama’s plans.” Unfortunately, it seems like Burgess doesn’t understand McCain’s plan either.