Ron Brownstone evaluates the health care plans of both Obama and McCain.
In an ad this week, the Obama campaign described that trade as "the largest middle-class tax increase in history."
That's flat wrong. For all but the highest earners with the most-expensive insurance plans, the credit would more than offset the additional taxes workers would face from ending the exclusion, the nonpartisan Tax Policy Center calculates. The real problem with McCain's idea is that, without the economic incentive provided by the exclusion, more employers might stop offering coverage. And even employers who want to continue could find it difficult because younger workers would be likely to use their credit to buy stripped-down, cheaper coverage on their own. That would leave employers covering only older and sicker workers, which could quickly swell premiums to unaffordable levels. That concern prompted the U.S. Chamber of Commerce and the Business Roundtable to criticize McCain's plan in an eye-opening New York Times article on Tuesday.
McCain's approach would save people money when they are young but expose them to greater financial and health risks as they age. It repudiates the essence of insurance, which aims to spread risk not only across the population but across an individual's lifetime. Obama is wrong to portray McCain's plan as a tax hike. And the Democrat's alternative raises its own tough questions, especially about cost. But Obama does not exaggerate when he says that his rival is offering a "radical" new vision of how Americans can safeguard their health.
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