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McCain Needs to Clarify His Health Care Plan Tonight

4:42 PM, Oct 7, 2008 • By GARY ANDRES
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As I wrote yesterday, opponents of John McCain are misrepresenting his health care plan. Some do so deliberately, like the Obama ads that only tell half the story, as I argued in my post. Others, I assume, are done out of pure ignorance, like this story by Froma Harrop posted on the Rasmussen Report today. She writes:

McCain's proposal strives to make health coverage less dependent on the workplace, encourage personal responsibility and preserve choice of coverage. It would provide a large tax subsidy -- a $5,000 refundable tax credit with which families could buy coverage. (Individuals would get $2,500.) And it would end the employer's deduction for health benefits and the exclusion of employees' health-care contributions from taxable income. [Emphasis added.]

Critics of the McCain proposal say that the loss of the tax break would prompt companies to drop their coverage. And low-risk workers would have less incentive to stay in their employer's plan. Furthermore, coverage for a family of four averages $12,000 a year, considerably more money than the $5,000 tax credit would provide.

The bold sentence is just factually incorrect. McCain's proposal is silent on the "employer deduction." It does not end it!

It does end the employee exclusion, but then offsets the additional taxes the employee owes with a generous tax credit.

One congressional health care expert - who wanted to remain anonymous - adds this little nugget about how it's Obama's proposal that will result in more people losing health coverage.

An interesting side-note is that Obama's pay-or-play mandate does more to blow up the employer-based system, by many estimates. Because Obama says employers who don't provide a sufficient level of coverage must pay a tax that goes to support a public plan, when employers decide to pay the tax rather than provide health insurance, all of those people who currently have employer-sponsored care will lose it and be put on a government program.

He adds that one estimate by The Lewin Group projects over 40 million people could lose employer-based coverage under the Obama plan.

McCain's plan is better for the working middle class (because of the tax credit) and will keep more people in employer-based coverage. He needs to hit those two points hard in tonight's debate.