Joe Klein Warns of McCain’s Hidden Tax Increase on Health Benefits

Joe Klein has decided that rather “than do the McCain campaign’s bidding by wasting space on Senator Honor’s daily lies and bilge–his constant attempts to divert attention from substantive issues” he will look at McCain’s positions on the issues, starting with health care. He warns readers that McCain’s health care plan amounts to a tax increase:

John McCain wants to tax your employer-provided health care benefits. He wants to replace those benefits with an insufficient tax credit–$2500 for individuals and $5000 for families (the average cost per family for health insurance is $12000).

There is a positive, progressive tax aspect to this: wealthier people should have to pay for health insurance themselves, without tax breaks from the federal government.

But make no mistake: this plan will do little or nothing for those who do not have insurance now–unless they are young and healthy–and it may well hurt a fair number of workers, especially unionized workers, who get gold-plated benefits from their employers.

It will certainly do nothing for families with members who have pre-existing conditions or children with special needs–because it makes no provision to regulate the insurers, forcing them to cover all comers at “community” rates that don’t discriminate against the people who need health insurance most.

It is amazing to me that Obama campaign has let things go this far without pointing out that McCain–who opposes the energy bill because it would increase taxes on oil companies–is actually proposing a tax increase on health care benefits for American workers. But that is precisely what the Senator from Arizona is doing.

I’ve been wondering why Obama hasn’t been hitting McCain harder on his health care plans for quite a while. I’ve been hoping that he is simply holding some ammunition for the final weeks of the campaign.

Besides simply taxing health care benefits, John McCain envisions a system in which individuals are responsible for paying a greater amount of their health care costs, believing this is a rational way to control costs.

For years Democrats have been placed on the defensive by having their health care plans be mischaracterized as being “socialized medicine.” This year Obama has the chance to put McCain on the defensive by showing how radical his plan is.  McCain’s plan will do virtually nothing for those who are uninsured or underinsured, and he also gives good reason for even those with insurance to vote for Obama since the result of McCain’s plan would be to increase out of pocket expenses even for those who are insured. How many voters, regardless of their financial situation, are really eager to foot the bill for more of their health care costs?

Update: Ezra Klein comes to the same conclusion about the result of McCain’s health care policies:

McCain wants to cut total health care spending. Along with his advisers, he thinks total health care spending is too high because employers by lavish plans and employees don’t realize those plans are coming out of their paychecks. If the employees were buying the plans, they’d buy cheapers ones, and use less health care. All these premises are probably true. And the outcome will be that people have less health care, and can’t access needed services, and go bankrupt a lot. The bottom line is that this isn’t merely a tax increase. It’s a governance philosophy that holds that the problem with health insurance is that you have too much of it, and John McCain aims to change that. He has, in other words, a policy that will pay down the federal debt with money raised through human misery.

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