McCain’s Health Care Reform Plan Could Almost Double My Insurance Costs

I’m not an economist, but I just can’t see how Senator McCain’s health care reform plan will do anything to save the average taxpayer money let alone solve our health care crisis.

We all know both presidential candidates’ plans are based on fundamentally different views. Senator Obama believes the government and the private sector must together ensure that everyone in the country has health insurance, while McCain believes that each individual is responsible for his or her own health care. Those issues aside, I see at least two huge cracks in McCain’s plan.

First is his $5,000 tax credit proposal for families and $2,500 for individuals. It seems to me, the credits are not nearly enough to help most Americans save money. My jaw dropped when I heard McCain say during last Wednesday’s final 2008 presidential debate, that the average health care insurance plan in America costs a family only $5,800 annually. I have no idea where he got that number, unless he was looking at data from almost a decade ago. According to the latest Kaiser Family Foundation annual Employer Health Benefits Survey the average health insurance premium costs more than $12,700 for a family and $4,704 for individuals. Kaiser Family Foundation’s news release for the 2008 survey even points out “premiums more than doubled since 1999 when total family premiums stood at $5,791 (of which workers paid $1,543).” Even the non-profit and non-partisan National Coalition on Health Care cites the Kaiser Family Foundations’ 2007 Survey which found the average family premium averaged nearly $12,100. By the way, according to its website, the Coalition’s honorary Co-Chairmen are Presidents George H. W. Bush and Jimmy Carter

So, I’m wondering how could McCain’s health care reform plan save me money? Right off the bat, McCain’s plan could actually increase costs for many Americans because the money their employer spends on their health care benefits would be considered taxable income to them. However, those costs could be offset by his proposed tax credits. So, I suppose there is a chance I’d save money there.

Considering the state of the economy right now, and the fact that medical benefits consume the largest share of employer benefit costs, most companies would jump at the chance of dropping them. And don’t count on your employers to give the money they save back to you. I doubt most companies will say, “Since we’ve decided to drop all of your health care benefits, we thought the nice thing to do was to give the cost savings back to you.” My guess is, most companies will say, “Due to the shaky economy you’re lucky your take-home pay is remaining the same.”

I wondered how I’d fair if my employer decided to drop my health benefits? So I did a little internet researching. I’m married, and my wife is covered on my company plan. So, I checked out some quotes at Maryland’s CareFirst BlueCross BlueShield. According to CareFirst a somewhat comparable insurance plan to the PPO we have now would cost us $7,236 a year. Now that doesn’t sound too bad, but I still need to find dental and vision coverage. I’m having a difficult time finding an accurate quote. I did find that that average dental care plan costs between $15-25 a month. Since we had a good dental plan, I’ll guess for the two of us it would cost $40 a month or $480 a year. I found less information on average vision insurance. Some numbers I found averaged around $10 a month. So let’s say for the two of us it would be $15 a month or $180 annually.

Added up, a somewhat comparable health insurance plan would cost me and my wife about $7,896 annually. With McCain’s plan, from what I understand, our $5,000 tax credit would go directly to our insurance companies. So we would be responsible for $2,896 a year or $241 a month. I have a feeling my numbers are lower than what they would be if I really was forced to purchase my own plans. However, the cost to me is still significantly more than what I pay now, which is $75 a month. That means under McCain’s plan I’d pay at the very least $166 a month ($1,992 annually) more than I do now. That’s a 45% increase.

The other massive fissure I see in McCain’s plan is the suggestion that increased competition, stricter controls on medical costs (like drugs), and limiting malpractice suits will somehow cut health care costs enough to help the uninsured and unemployed gain health care coverage. While their literature acknowledges the large number of uninsured, if you listen to at least one of McCain’s health advisers, there are very few uninsured people to worry about anyway. The Dallas Morning News reported John Goodman, “who helped craft Sen. John McCain’s health care policy, said anyone with access to an emergency room effectively has insurance.”

McCain’s plan to ask states to create a federally-supported Guaranteed Access Plan or “high-risk” pool for people with pre-existing conditions sounds more like a plan to protect insurance companies than to help the sick or the poor.

So what about Obama’s plan? I certainly don’t think it’s perfect, but I believe it’s leagues above McCain’s. Obama’s plan to create a new public health care program is going to be complicated and most likely bogged down with bureaucracy. But it will achieve the goal of ensuring every American has access to health care insurance.

The fact that Obama wants to require all children to have health insurance seems like a no-brainer, and I’m shocked it’s not already a law. While I have no problem with Obama’s plan to require every employer to offer employees health benefits or contribute to the cost of a new public insurance program, I can see why some people would. The proposed mandate could be considered to many small business owners, who claim they can’t afford health care benefits, a burdensome new tax. However, Obama’s plan to give small businesses a refundable tax credit of up to 50% of premiums paid on behalf of their employees could help ease those business owners’ pain.

Take this layperson’s view with a grain of salt. I am by far not an expert in any of these areas and I’m sure I’ve missed some important provisions contained in each candidate’s plan. I hope this just gives you something to think about and that you do your own investigating.

Saturday, October 18, 2008