John McCain's Health Insurance Plan

The top three concerns include making healthcare more affordable, eliminating the rising costs of healthcare, and employers' decreasing participation in their workers' healthcare plans. However, Americans are asking themselves whose plan will be the most effective.
This week, I'll focus on Republican John McCain's healthcare plans. Next week, I'll delve into the views of the Democrats.


McCain's Goals

McCain's biggest goals are eliminating a decades-old tax break and allowing people to choose their healthcare plan according to their "stage in life."

Eliminating the Tax Break

During World War II companies, which were in competition with one another for workers, began offering employees tax-free health benefits in place of pay. However, this soon backfired, as employees began to ask for better and more elaborate healthcare packages. And because of the need for employees, companies would pay. This put a strain on those being paid — things like raises were abandoned so that non-paid employees could get the health benefits they required.

McCain's goal is to eradicate this tax break. Instead, he has proposed that employers should only pay for an employee's healthcare as much as that employee could afford to buy on his or her own. This would give the employer the upper hand and place more of the responsibility on the employee.

"I predict that most companies would stop paying for healthcare in three to four years," says consultant Robert Laszewski.

With McCain's proposal companies, instead of shelling out money for healthcare, would simply add more money to paychecks for employees to purchase healthcare on their own.

Giving the Consumer More Power

One of McCain's strongest points resides in allowing people to choose a healthcare plan according to their stage in life. Young and healthy individuals don't necessarily need the same plan as someone in his or her 40s with four dependants. Instead, those who are younger should be able to pay for cheaper, less elaborate plans.

However, with the current healthcare plan, nine states, including New York, California, and Texas, require all those who are covered to pay for a standard list of benefits, whether they are 20 years old or 45 years old. This means someone healthy in his or her 20s may be paying for cancer-related benefits. This is one reason that younger people are dropping their healthcare coverage altogether. By allowing people to choose plans unique to their lives, both the young and old will be able to purchase reasonable healthcare.

Problems

However, there are some problems with McCain's plan. One is his "across state line" healthcare plan, which allows every state to sell the same coverage. His reason for it? Community rating. In certain parts of the country, everyone, whether in their 20s or in their 50s, pays the same for healthcare. To McCain this is unfair. Those in their 20s, he believes, should be able to pay for different, cheaper coverage because they don't require the same benefits as older individuals.

But if McCain were to eradicate community rating, people in their 20s who are paying high premiums in, say, New York may leave their coverage for cheaper plans, like those in Pennsylvania. Ultimately, then, the older crowd in New York, who are relying on the younger generation to pay alongside them, would have their premiums increased.

So while McCain's plan to erase the decades-old tax break and give more power to consumers appears revolutionary, drawbacks still remain. Will his plan be enough to steer our current healthcare plan away from danger? Only time — and voters — will tell.