Holtz-Eakin Implosion Watch: Admits Inferiority Of Individual Health Care Plans…Again

eakinwatch.jpgEarlier this month — after previously maintaining that Sen. John McCain’s health care proposal would lower costs by allowing healthier Americans to find cheaper coverage in the individual market — McCain senior policy adviser Douglas Holtz-Eakin argued that “younger and healthier employees with the McCain health care tax credit will have a bigger incentive to stay with the employers“ because employers offer better coverage than individual health care plans.

At the time, the Wonk Room considered Holtz-Eakin’s remark an unfortunate, if somewhat desperate argument, which betrayed a disorganized campaign frantic to convince voters that they won’t lose their employer-sponsored coverage.

But as the days passed and the campaign moved into its home stretch, Holtz-Eakin’s comments ranged from the bizarre to the truthful:

– On CNBC, Holtz-Eakin asserted that “you can’t cut taxes for 95 percent of the American people, if just under 50 percent aren’t paying taxes” and then claimed that McCain would cut taxes for “everybody.”

– Last week, during a segment on Bloomberg television, Holtz-Eakin finally admitted that temporarily cutting the capital gains tax would overwhelmingly benefit millionaires

– On Bloomberg, Holtz-Eakin conceded that McCain’s health care tax credit wouldn’t cover the entire cost of a comprehensive health plan and would only allow some Americans to buy insurance in the individual market.

– On Face the Nation this Sunday, Holtz-Eakin seemed to argue that carbon dioxide is not a pollutant.

And so it is with great fanfare and anticipation that the Wonk Room unveils The Holtz-Eakin Implosion Watch, a semi-regular series chronicling Holtz-Eakin’s truthiest moments in the waning days of the campaign.

Today, Holtz-Eakin again strays off message, telling CNN, “younger, healthier workers likely wouldn’t abandon their company-sponsored plans“:

“Why would they leave?” said Holtz-Eakin. “What they are getting from their employer is way better than what they could get with the credit.”

Hotlz-Eakin argues that “under McCain’s plan, employer-funded care will generally be preferable to the tax credit alone — since it’s the tax credit plus the employer contribution — but that the tax credit alone will be a huge step up for people who have nothing at all.” In other words, in the individual market, without the employer contribution, Americans would have to pay more for less…and less as McCain’s tax credit does not keep up with medical inflation.

In fact, high deductible plans typically lead to higher out-of-pocket expenses, resulting in “a one-time shift in spending from premiums to patient out-of-pocket outlays.” As Holtz-Eakin himself points out:

McCain’s would leave them better off than they are now, but still with something less than complete coverage, unless they reach into their pockets to supplement the tax credit.

Oddly enough, Holtz-Eakin is now arguing that under McCain’s health care plan (which pushes about 20 million Americans out of the employer market and into the unregulated individual market), Americans would receive sub-prime health care coverage.