McCain Health Insurance Plan - Much Worse Coverage Than What You're Getting Now, Says Senior McCain Economic Adviser

News, commentary

According to Sen. McCain's Senior Economic Policy Adviser Doug Holtz-Eakin (photo), insurance to be made available under the McCain health insurance plan would be much worse than what is currently available under employer-based plans.

The comments by McCain's Senior Advisor came in response to criticism that the McCain health insurance plan would lead to younger, healthier workers leaving their employers plans, leaving only older and less healthy employees behind, leading to major insurance premium increases on both employers and the remaining employees -- and ultimately a total loss of health coverage.

Holtz-Eakin argued that younger and healthier workers wouldn't leave the employers plans in favor of the tax credit:

"Why would they leave?" asked Holtz-Eakin said. "What they are getting from their employer is way better than what they could get with the credit."
(Emphasis added.)

Experts in the economics of health care fear that the McCain plan will cause the loss of coverage for millions - much of which may be replaced (by the inferior plans), but only after a great deal of turmoil and pain -- and no increase to the number of people insured. As discussed in the CNNMoney article:

Experts, however, fear that eliminating the tax advantage of employer-based coverage would prompt younger, healthier workers to leave their office plans. If that happened, costs for the remaining workers could skyrocket. Companies may drop coverage altogether.

"If companies know their employees have the tax credit, it relieves them of the burden of providing coverage," said Sara Collins, who directs a health insurance program at the Commonwealth Fund. McCain's plan "moves people out of the employer system and to the individual market."

Some 74% of companies said that eliminating the tax exclusion would have a "strong negative impact on their workforce," according to a September survey by the American Benefits Council.

Estimates vary, but the Tax Policy Center estimates that 20 million people would lose their employer-based coverage by 2018. Roughly the same number would gain insurance through other means. But, overall, McCain's plan would do little to reduce the number of uninsured.

(Emphasis added.)

**

Holtz-Eakin had been Director of the Congressional Budget Office (CBO) for the Republican Congress in 2003 - 2005; he was known for speaking his mind even when what he said didn't fit the political needs of his benefactors.

An article in The Washington Note called him "A Thorn in the Side of the Bush Administration", for doing such things as saying that the Bush tax and spending plans wouldn't substantially stimulate long term economic growth, and that Bush's tax cuts "were heavily skewed in favor of the wealthiest Americans."

Quoting from the New York Times, The Note says that the CBO under Holtz-Eakin:

raised doubts about proposals to partly privatize the Social Security system, concluded that abolishing estate taxes would reduce charitable contributions and calculated that allowing same-sex marriages would slightly increase federal revenues.

And now, it seems, Holtz-Eakin gets to be a bit of a thorn in the side of John McCain. There is no hiding that those who are left to rely upon the McCain health plan -- those who cannot obtain employer-based policies, those who are self-employed, those who have preexisting health conditions -- will be left with the admittedly inferior coverage to be available to those faced with what the McCain health plan will offer.

The "lucky" few will emerged unscathed - only if the employer health insurance plans survive.

At last, a bit of straight talk from the McCain camp!

Let's watch as the campaign scrambles to distance John McCain from Holtz-Eakin's remarks and the honest evaluation they reflect.


(Photo from Maxwell school at Syracuse University.)