McCain-Palin Health Plan: An Apple a Day, or Your Wallet

Looks like McCain’s health care plan aims to reduce access to employer-based coverage that protects most of us in the U.S. without giving us anything to fall back on. Bob Herbert:

A study coming out Tuesday from scholars at Columbia, Harvard, Purdue and Michigan projects that 20 million Americans who have employment-based health insurance would lose it under the McCain plan…

For starters, the McCain health plan would treat employer-paid health benefits as income that employees would have to pay taxes on.

According to the study: “The McCain plan will force millions of Americans into the weakest segment of the private insurance system — the nongroup market — where cost-sharing is high, covered services are limited and people will lose access to benefits they have now.”

If that isn’t nasty enough,

The whole idea of the McCain plan is to get families out of employer-paid health coverage and into the health insurance marketplace, where naked competition is supposed to take care of all ills. (We’re seeing in the Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers and Merrill Lynch fiascos just how well the unfettered marketplace has been working.)

Taxing employer-paid health benefits is the first step in this transition, the equivalent of injecting poison into the system. It’s the beginning of the end.

When younger, healthier workers start seeing additional taxes taken out of their paychecks, some (perhaps many) will opt out of the employer-based plans — either to buy cheaper insurance on their own or to go without coverage.

That will leave employers with a pool of older, less healthy workers to cover. That coverage will necessarily be more expensive, which will encourage more and more employers to give up on the idea of providing coverage at all.

The upshot is that many more Americans — millions more — will find themselves on their own in the bewildering and often treacherous health insurance marketplace. As Senator McCain has said: “I believe the key to real reform is to restore control over our health care system to the patients themselves.”

By forcing them, and their employers, to opt out of coverage altogether.

The study itself reads like a horror show, and I can’t help but wonder where that would leave someone like me. I’m a low-wage hourly worker who relies heavily on employer-provided benefits. In the last couple of years I’ve been diagnosed with ulcers and carpal tunnel syndrome, had to have four wisdom teeth pulled on an emergency basis, and I practically breed whatever virus it is that causes low-grade fevers and general crappiness, the kinds of things you can’t cure with a little rest and a Hot Toddy. The differences in the quality of care I’ve received as an insured person and an uninsured person are enormous. I can’t fathom what it would do to my family to lose these kinds of benefits and be forced to pay out of pocket on the kind of wages we make.

My question, like Herbert’s, is why the hell we aren’t paying more attention? And where is my Glorious People’s Revolutionary Health Clinic?

Ezra has more. And it’s more staggering than what I’ve already excerpted.

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34 comments for “McCain-Palin Health Plan: An Apple a Day, or Your Wallet

  1. ElleBeMe
    September 16, 2008 at 3:36 pm

    This is by far the most frightening story I have read in a long time. Thank you for sharing – I plan on redistributing it to everyone I know.

    And I would wager, like ezra did- it would be far more than 20 million who would lose coverage. A win-win for big HMO’s…a lose-lose for the human beings who need coverage.

  2. September 16, 2008 at 4:23 pm

    Just when I think that things can’t get worse from the McCain camp, just when I think they’ve hit rock-bottom . . . they pull out something else.

  3. Kathygnome
    September 16, 2008 at 4:26 pm

    It’s about time this farce of a health care plan got more attention. A free market isn’t free if you die when you don’t buy the product.

  4. BadKitty
    September 16, 2008 at 4:28 pm

    There’s no way I could get an individual insurance policy – I’m a cancer survivor – which would force me into MN’s program for the uninsurable along with a couple million of other people with similar histories, which would bankrupt the state. Our beloved Governor Pawlenty is already trying to gut the state program. I think they’re trying to kill us. I used to joke about that but it’s not so funny anymore.

  5. September 16, 2008 at 4:29 pm

    A disaster for people who need coverage or who will ever need coverage.

    It’s also, though, likely to be a lose-lose for the general economy of the country. There is a great discussion about this over at Making Light, too.

    I commented there regarding my situation, which certainly can’t be unique: I have a chronic illness that would likely keep me from getting coverage but is very well controlled with very expensive medications. Without the meds, I don’t work, that’s for sure. Maybe I die. Or maybe I get sick enough trying to buy just *some* of my meds that I can no longer work and support my family, and I go on SSI and then get Medicaid, which pays for my prescriptions.

    I don’t think our economy fare well with all of those folks with chronic illnesses who are forced into individual coverage that they can’t qualify for leaving the workforce entirely, instead.

  6. September 16, 2008 at 4:53 pm

    Um yeah, OBAMA CAMP WHERE IS THIS ADVERTISEMENT? I certainly hope that they’re working on one, along with a press release and a way to include it in Obama’s stump speech.

  7. September 16, 2008 at 4:58 pm

    Oh, no. I went my whole life without insurance. I second Cara. Why have they ignored this? Yes, the economy is in the crapper but this is connected. Someone? Anyone? Does the MSM care?

  8. September 16, 2008 at 5:04 pm

    This is really frightening and makes me realize how much for granted I take my excellent employer coverage.

  9. Rhetor
    September 16, 2008 at 5:30 pm

    Hey Welcome to the world of TEH GAYZ!! where if you’re lucky enough to work for a company that offers DP health insurance, you get taxed on it as if it were additional income.

  10. September 16, 2008 at 5:32 pm

    Rhetor, are you serious?! I didn’t know that’s how that worked…

  11. Mark S.
    September 16, 2008 at 6:30 pm

    I can’t believe a major party presidential candidate, even a Republican, would advocate a plan that encouraged employers to not ensure their employees. It is absolutely insane.

    Tax credits are great if you have a lot of income, but their not so great otherwise. Take, for instance, a family of four with an income of $60,000. Using the H&R Block tax calculator, I got that they would owe $2,573 in tax. That family would probably have to spend at least four times that amount for health insurance. So, yeah, they wouldn’t owe any income tax, but they would be a helluva lot worse off.

  12. Sarah
    September 16, 2008 at 6:52 pm

    Why, didn’t you guys know that homosexuality actually produces antibodies against many common “straight” diseases? It’s true! Viruses that try to enter a gay person’s system get confused by their radically altered “gay” genome, and this “gay” genome codes for natural antibiotics that–

    Ugh, I’m done. Pretending gays don’t need the exact same rights and health insurance benefits as everybody else is exhausting!

  13. William
    September 16, 2008 at 7:01 pm

    God damn, nothing pisses me off then when conservatives try to woo us libertarians with “free market” proposals and COMPLETELY MISS THE FUCKING POINT. Employer provided health care, like employee compensation, is an effect of the market. Companies that want better applicants provide better compensation. Often times that compensation comes in the form of relatively cheap health insurance (which is cheap because larger companies can demand discount rates in a free market) that is made even better by employer contribution. The end result is that large numbers of people get health care without the government having to be involved in any way. Its obviously not perfect, but for a significant number of Americans it works pretty well and if our goal is universal coverage it means far less people who need to be covered by other options. Its win/win.

    Gaming the tax code to encourage or discourage behavior isn’t creating a free market. Actually INCREASING tax burden in order to twist someone’s arm (as opposed to, you know, providing some kind of service) is even fucking worse. And the GOP wonders why so many of us libertarians are voting for Obama with a smile.

  14. Pencils
    September 16, 2008 at 9:56 pm

    Like you, punkrockhockeymom, I’m chronically ill. The only reason I can work is my very good employer-provided coverage that has me in a good pain management program. Without pain management, which is expensive, I won’t be able to work, I won’t be able to take care of my child, and I’ll be a burden on society. How exactly is this a good thing? I’m sure they’ll think that my regular doctor can cover my pain management more cheaply than my specialist, but that’s a joke (and an entirely separate topic) and I’ll just have to do without. Besides that, I won’t be able to get coverage on my own because of my pre-existing illness, so I’ll have to go on my husband’s policy, if he still has one. This is making me feel ill, stressed, and in pain.

    I was never planning on voting for McCain, but I know a lot of people who are, generally for one dumb reason after another. I’m going to forward them the health care report, maybe it will wake them up.

  15. Suzanne
    September 16, 2008 at 10:59 pm

    This is more than frightening. But what’s more so is just how oblivious, sedated, exhausted the population is as regards this issue. Moore’s Sicko got no where near the attention his 9-11 did because I believe the issue gets at some fundamental myths and fairy tales we live in.

    We don’t take care of citizens at a basic, humane level. There I killed one of the myths.

    I lived in Europe for most of the 90s and as a freelance teacher was provided affordable (my premium was based on my income) state regulated health insurance. My viewpoint is entirely influenced by the experience of being then in my 30s now in my 40s and having friends getting ill there and here.

    When I say I don’t want to befriend someone here who’s uninsured because I don’t want to have to carry that emotional burden, I’m also I’m critiquing the system. As utterly cruel and ugly as it sounds, on the personal level, it’s a survival mechanism. I’m doing everything I possibly can to save my own aging ass, and I resent having to save yours.

    Gee, now that’s what democracy is about…

    No, I don’t want to donate to a 10k for some health cause. I want to pay more taxes so everyone has health care.

    These do-good, feel good, social mechanisms are part of our Disneylandesque approach to a civic life we’ve come to think is equitable.

    It’s not.

    I don’t think the majority of Americans fathom what I’m talking about, so I don’t talk about it much. It makes people very uncomfortable when I say that the quality of life in the United States is inferior in many ways to that of other weathly nations.

    The free choice rhetoric turned Kool-aid is in the drinking water. Even aware, politically conscientious folks are drunk on it.

    It’s mostly bullshit, as the current credit crisis attests to.

    No, having 200 choices of shitty breakfast cereals and diet drinks does not add to my quality of life.

    Most Americans don’t have the capacity (time, education, where with all) to make informed choices and that’s exactly why the GOP could win.

  16. September 16, 2008 at 11:49 pm

    “There’s no way I could get an individual insurance policy – I’m a cancer survivor”

    I can’t even begin to articulate how much that phrase disgusts me.

    (I’m Canadian, and I love Tommy Douglas.)

  17. denelian
    September 17, 2008 at 2:24 am

    how the fuck is taxing the money that companies pay for employee benifits even LEGAL??? seriously?

  18. Marked Hoosier
    September 17, 2008 at 4:09 am

    That, my friends, is change we can believe in.


    The scary thought is McCain might actually win… :(

  19. SarahMC
    September 17, 2008 at 7:13 am

    The prospect of McCain winning and instituting this healthcare plan terrifies me. Like a few of you, I have a chronic condition that is very, very expensive to treat. Luckily, my employer provides great benefits, so I’m able to manage things OK right now. I fear that eventually my employer will have to drop people or downgrade our benefits, in which case I really don’t know what I’d do. No company would agree to cover me as an individual.
    I couldn’t work, and I honestly don’t want to live if I have to live in excrutiating, untreated pain.

  20. kathygnome
    September 17, 2008 at 9:03 am

    Hey Welcome to the world of TEH GAYZ!! where if you’re lucky enough to work for a company that offers DP health insurance, you get taxed on it as if it were additional income.

    Rhetor, are you serious?! I didn’t know that’s how that worked…

    Not just domestic partners, if you’re married in MA or CA it’s the same thing on your federal taxes.

  21. ElleBeMe
    September 17, 2008 at 9:10 am

    @ Suzanne:

    “It makes people very uncomfortable when I say that the quality of life in the United States is inferior in many ways to that of other weathly nations. ”

    I’ve lived in Europe and I have to agree with what you said 100% – and you’re on the money…it makes people very uncomfortable to think that the USA isn’t utopia. We have our perks – but when it boils down to basic human services that ALL people should have, Europe has it hands down. As a mother of 2, let me just say that maternity leave in this country is a joke – and I had it good with 8 weeks of paid leave (at 60% of my salary) and 12 weeks “allowed” time off. It’s ironic that those who screech taht they’re for the “baybeez” are the same people who think maternity leave in Europe is ridiculously long.

    As for this healthcare crap from McCain…my eldest son has a speech disorder that insurance will only partially cover (they don’t like to cover developmental delays/disorders because the kids will eventually “grow out of” them), but private care is exorbitantly expensive. Then there’s the Federally Fubnded “child find” program through our county – but they told us that because we have “health insurance” our son would get services based on his “need”…and because we can (supposedly) afford “private care through insurance,” we’re SOL….

    Everywhere you turn there’s someone out to fuck you, and frankly neither McCain or Palin are my type.

  22. CTD
    September 17, 2008 at 10:17 am

    I can’t help but wonder where that would leave someone like me.

    If, as you indicated, you have a very low income, you are likely in a correspondingly low tax bracket. This means you won’t be paying much in the way of taxes on your benefits. Per the linked article, you’ll also receive a $2500 tax credit. If you are in a low tax bracket (say 15%) , there’s no way you’ll be paying more that $2500 in taxes on you benefits in a given year. Your benefits would be costing you almost $1400/month (for you alone) before you’d be paying more in taxes than you are now.

  23. Rhetor
    September 17, 2008 at 11:05 am

    Below is info from HRC’s website. My employer is considering DP benefits and I went to a seminar discussing them. Because of the tax issues involved, the accounting system/method needed to deal with these benefits is horrendously complicated and conviluted. After the seminar, I turned to the HR person and said, I really appreciate that y’all are thinking about this. I wouldn’t want to tackle it AT ALL.

    —HRC INFO—
    Taxation of Domestic Partner Benefits

    When an employer provides health insurance for the spouse or dependents of an employee, federal tax law allows the value of the health insurance coverage to be excluded from the employee’s gross income.

    But when an employer provides the same health insurance coverage for the domestic partner or the dependents of the domestic partner of an employee, federal tax law considers the fair market value of that coverage, including the employee’s pre-tax contributions, as “imputed income” to the employee. According to a December 2007 report by the Center for American Progress and the Williams Institute, employees with partner health benefits now pay on average $1,069 per year more in taxes than would a married employee with the same coverage. The only exception is when a domestic partner qualifies as a dependent of the employee under IRS definitions.

    Additionally, employees cannot use pre-tax dollars to pay for a domestic partner’s coverage, precluding them from the full benefits of a Flexible Spending Account, Health Reimbursement Account or Health Savings Account.

    Because the imputed income increases the employee’s overall taxable income, it also increases the employer’s payroll taxes – the Social Security and unemployment insurance tax that employers pay based on employees’ taxable incomes. According to the same CAP/Williams Institute report, employers pay a total of $57 million per year in additional payroll taxes because of this unequal tax treatment.

    As a result, gay, lesbian, bisexual and transgender individuals that secure employer-provided health insurance coverage for themselves and their unmarried partners face a significant tax penalty; one that, depending on the individual, can be in the thousands of dollars per year and result in the individual paying upwards of 50% more in federal taxes. Meanwhile, employers that extend partner health benefits pay higher payroll taxes and face the administrative burden of maintaining separate payroll functions for income tax withholding and payroll taxes.

  24. Chris
    September 17, 2008 at 11:24 am

    Uh, I’m as confused as denelian. They’re BENEFITS. How can it be legal for the government to tax BENEFITS? This is some disturbing shit.

  25. September 17, 2008 at 11:35 am

    As far as I can tell, they’re trying to equate benefits with earned income, which are already closely tied.

  26. Travis
    September 17, 2008 at 1:14 pm

    This whole thing stinks of Karl Rove and “The Endless Campaign”

    McCain is fine with our current health system. But Health Care is a “hot button issue”, so he has to say SOMETHING!

    So what do they (the McCain strategy team) come up with? The craziest health plan ever, based on supply-side economics and voodoo.

    It’s complete shit, and would never get through Congress in a million years (taxing benefits? Even less viable than universal coverage, if you ask me). But now, John McCain can say “I have a Health Plan that will bring Health Care Choice to EVERY AMERICAN (applause)”.

    And if he gets elected, he can “call upon Congress to pass this bill which will bring Health Care Choice to EVERY AMERICAN (applause)”. And when they inevitably don’t pass it, he can get back up there and say, “I called upon Congress to give Health Care Choice to EVERY AMERICAN (applause)…and America, THEY failed you! (Boo)”.

    Pretty ingenious in a Richard Kuklinski kind of way.

  27. William
    September 18, 2008 at 9:43 am

    Uh, I’m as confused as denelian. They’re BENEFITS. How can it be legal for the government to tax BENEFITS? This is some disturbing shit.

    Its all in how you legally define income. If you go on a game show and at the end of the day you win a car worth $30,000, a vacation worth $5,000, $2,000 worth of other prize, and $1,000 cash the IRS sees you as having just earned $38,000 worth of taxable income because it defines all those things as income. McCain is talking about changing the law so that forms of employee compensation other than cash are considered income.

  28. Rosa
    September 18, 2008 at 1:55 pm

    ..and some benefits already are taxed as income. Such as tuition benefits over $5K/year. And, of course, domestic partner benefits, since the federal government wants to discourage companies from offering it.

    I can’t even go to family gatherings anymore because I get in fights about universal health care with health-care-worker family members who have drunk the AMA drug cocktail about how bad it is.

  29. JoGirl
    September 18, 2008 at 7:07 pm

    As a result, gay, lesbian, bisexual and transgender individuals that secure employer-provided health insurance coverage for themselves and their unmarried partners face a significant tax penalty

    — —————————

    Well, that’s just their own fault for choosing to be gay, right?

    Ugh, this whole situation is making me sick. My beautiful 3-year-old niece is directly affected by these discriminatory policies, because my sister is a lesbian in a long-term domestic partnership with a woman who is the primary breadwinner for their little family unit. They’ve been together for eight years, and are just wonderful parents.

    Thank goodness they can finally get married legally under California state law… they’re doing so in less than two weeks. I only pray that there aren’t enough voting horrible bigots in this state to take away their right to equal treatment this November.

    And now McCain wants to make things just as bad for the rest of us? I guess that woudl be one kind of equality.

  30. September 18, 2008 at 9:53 pm

    Thanks for the heads-upon this info. I used it as one of the points in my post on the current economic crisis:

  31. American First
    September 19, 2008 at 1:25 am

    Like the tax plans – the health plans from both candidates are not very good.

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