Supporters, opponents say McCain health plan could change system

Arizona Sen. John McCain’s health insurance plan could change the way health insurance is offered and acquired in the U.S., say both opponents and supporters.

McCain wants to give consumers more control over their health insurance offering $5,000 in annual health tax credits to families and $2,500 to individuals to help cover costs. He also supports purchases by consumers and businesses across state lines saying it would increase competition and lower costs.

Proponents say the tax credits could lead to a more consumer-driven health insurance system and away from government mandates, universal coverage and the current system heavily dependent on employer-based coverage.

Opponents warn that McCain’s tax credits could result in employers dumping their health insurance coverage and that the senator’s proposed deregulation of health plans could mean fewer services for sick and older workers.

Damien LaVera, spokesman for the Democratic National Committee, said McCain’s plan, including taxing some benefits, could push businesses to drop insurance plans and coverage.

The McCain campaign insists businesses still will get the same tax help for offering health benefits.

Barack Obama favors a hybrid universal health care program that includes coverage mandates with some exemptions for small businesses along with expanded government programs.

Byron Schlomach, an economist for the Phoenix-based Goldwater Institute, said McCain’s health insurance tax credits could result in employers giving cash payments to workers who would then go out and buy their own insurance with those funds along with the annual tax credits. “I hope this happens,” he said. A more consumer-driven insurance system could help improve quality of care, he added.

Skeptics say, however, consumers buying insurance on their own may find in problems trying to pool coverage and obtain lower costs. They also point out that some states have fewer regulations than others, such as California and New York, which mandate certain coverages and offer more protections for people with preexisting conditions.

There are an estimated 44 million people in the U.S. without health insurance.

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