MCCAIN’S HEALTHCARE CONTRADICTION…. How bad is the McCain healthcare plan? So bad that the McCain campaign is now undermining its own proposal.
Douglas Holtz-Eakin, McCain’s senior economic policy adviser, told CNN that younger, healthier workers probably won’t give up their employer-sponsored healthcare plans because they would have no incentive to change. “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.”
That’s true. Taking a credit given by a McCain administration onto the open market would be very unappealing, especially those who are getting “way better” employer-sponsored healthcare.
But here’s the thing: this isn’t supposed to be the McCain campaign’s argument. As Ezra explained:
Young workers are cheap. They don’t need much health insurance. The theory of the McCain plan is that because of this, they will take their tax credit and head over to the individual market, either purchasing very cheap health care or no health care at all. This, in theory, will bring down total spending.
Holtz-Eakin is saying the theory may not work. The individual market sucks. You can be eliminated for preexisting conditions. Administrative costs are sky-high. There is no protection against the whims of your insurer. The same policy you had with your employer will, for these reasons and others, cost $2,000 more on the individual market. As such, young people may not exactly want to throw themselves into that situation.
Moreover, what young folks get from their employers is much better than what they’d receive on the individual market. Employer-based coverage plans are not aimed at young people who don’t need much in the way of health care. They’re aimed at older workers, and workers with families, who do. If the young workers, who are the good insurance bets, can’t get better coverage on the individual insurance market, imagine how much worse the coverage will be for those who actually need to avail themselves of health care services.
Quite right. And what makes McCain’s plan so striking is that it would discourage employers from providing the “way better” healthcare, precisely so workers would take McCain’s credit onto the open market. “Why would they leave?” Holtz-Eakin asks. Because McCain wants them to.
“What they are getting from their employer is way better than what they could get with the credit,” Holtz-Eakin argues. Well, sure. The next question, though, is why Holtz-Eakin’s boss believes the smart thing to do is to push Americans away from their “way better” healthcare, taking inadequate credits that the McCain campaign now concedes are worse than the status quo.
Update: Atrios’ summary is far more straightforward than mine: “So, the [McCain] plan is to increase taxes on people with decent health care plans and provide a tax credit for people to buy shitty ones. That’s some wealth spreading we can believe in, my friends!”