The Candidate: John McCain (R)
The Issue: Health Care
The Position: McCain supports tax credits for insurance.
The Cost: $287 billion annually (Source: Health Systems Innovations Network)
The Media Position: “What’s wrong with government-run health care?” George Stephanopoulos, ABC “This Week,” April 20, 2008.

The Issue

      Politicians, including Republican presidential candidate Sen. John McCain, Ariz., and the media have illustrated the necessity of health care reform by citing Census Bureau statistics suggesting that in 2006 some 47 million Americans were uninsured. The Bureau in August 2008 revised the number to 45.7 million uninsured during 2007.

      Since the beginning of 2008 alone, the broadcast networks have cited the statistic at least 18 times.

      The problem: the number is inflated. It includes people who aren’t American citizens, people who could afford their own insurance, and people who already qualify for existing government coverage but haven’t taken it.

      McCain has proposed a market-based plan that limits government involvement in the industry, instead favoring tax credits that would assist Americans in purchasing their own coverage. His plan also includes a government backstop aimed at covering the uninsurable.

     “While still having the option of employer-based coverage, every family will receive a direct refundable tax credit – effectively cash – of $2,500 for individuals and $5,000 for families to offset the cost of insurance,” McCain’s Web site says. “Families will be able to choose the insurance provider that suits them best and the money would be sent directly to the insurance provider.”

     Under McCain’s plan, employers would still receive their tax benefit for paying workers, whether they compensate them in the form of health benefits or wages. His plan assumes employers no longer paying for coverage benefits would raise salaries equal to the amount they had been paying for insurance. The tax credit would seek to offset the higher taxes being paid by workers due to their higher salaries.

     Workers who currently get insurance through their employers – 60 percent of American workers – are getting a tax break, but it’s invisible because the employer is paying the premiums. That break averages $4,200 for a higher-income family. The new tax credit would be $5,000 per family and would be refundable, meaning those on the lower end of the income scale would get the same amount, even if they don’t pay taxes. 

     The concept behind McCain’s plan is to give people portable plans they could take with them from job to job and state to state. McCain argues his proposal would increase competition among insurance providers and offer families more freedom in shopping for coverage.

     When it comes to covering the “uninsurable,” McCain’s proposes a “Guaranteed Access Plan” (GAP), which would help states ensure that those with pre-existing conditions could obtain coverage.

The Media Position

     ABC “This Week” host George Stephanopoulos characterized the media’s position on the health care debate in an April 20 interview with Republican nominee Sen. John McCain, Ariz. He asked, “What’s wrong with government-run health care?”

     Stephanopoulos echoed one standard liberal criticism of McCain’s plan, reminding McCain that “Democrats say your tax credit plan will not come close to covering everyone and it especially won’t help people with pre-existing health conditions.”

      Other network coverage featured Democrats brought on to criticize McCain’s plan. Everyone from Elizabeth Edwards – wife of former senator and presidential hopeful John Edwards – to DNC Chairman Howard Dean were put on air to attack the Republican’s proposals.

     “Sen. McCain’s is a lot more problematic and potentially enormously expensive,” Elizabeth Edwards said on ABC’s “Good Morning America” June 23, even though McCain’s plan is usually estimated to be far less expensive than Obama’s.

     As networks have favored a government-run plan, at least some print media outlets have acknowledged the potential consequences of such a system. In an August 25 special section, editors of The Wall Street Journal wrote that the “likely result” of Obama’s plan would be “more Americans buying insurance with the help of government, with more people insured, but government spending a lot for subsidies.”

Free Markets in Health Care

     The Health Systems Innovations Network estimates McCain’s entire package of health care proposals will cost $287 billion annually -- $18.4 billion of which would go toward the GAP proposal.

     Grace-Marie Turner, president of the free market health care advocacy group the Galen Institute and a Business & Media Institute adviser, said McCain’s proposals have come from members of the free market health policy community, including her own group.

     “We want to expand access to private health insurance that people are selecting and not having that organized by government bureaucracies or expanding government programs,” she said. “So the central point and the central idea in Sen. McCain’s plan is expanding access to private health insurance coverage by spending more efficiently the dollars that we’re already paying for people to get health insurance, and giving people the opportunity to make those choices themselves instead of having government dictate them.”

     She said it was reasonable to expect that if employers stopped providing health insurance policies as a fringe benefit, salaries would rise so workers could purchase their own coverage. Economists agreed.

     “It’s a very competitive market for workers and if one benefit is taken away from workers, the forces of competition will cause those workers to retrieve that benefit in some other form,” Dr. Donald Boudreaux, a professor of economics at George Mason University, said. “So I don’t have any doubt that if you eliminate that benefit – the employer paying the health care premium benefit – some other benefit will accrue to the worker, most probably a higher base salary.”

     Boudreaux pointed to the financial crises created by problems with Fannie Mae and Freddie Mac as evidence that private markets, not government involvement, were better for major issues.

     “You know again, right now we’re in the midst of this horrible, scary financial turmoil all brought about, in my view, or largely brought about by long-lasting government efforts to make housing quote ‘more affordable,’” he said. “Well as a good friend of mine from Boston mentioned to me recently, let’s hope that government efforts to make health care affordable don’t have the same consequences as government efforts to make housing affordable have had.”

     Offering criticism of both candidates’ plans, Boudreaux said that “virtually every health care plan that I’m aware of involves – for my tastes, in my professional opinion – involves way too much central direction mandating how people should be covered and involvement in the medical care industry that I worry it’ll just make things worse. I would get government out of the health care industry.”

     Still, Heritage Foundation analysts said McCain’s plan was less government intrusion.

      “It targets the specific problem of the hard-to-insure and the uninsurable without severely altering or undermining the health coverage options for everyone else,” The Heritage Foundation wrote of McCain’s plan in an October report.

     “Senator McCain’s vision for health care reform is underscored by a principled commitment to personal freedom,” the report concluded. “He focuses on reforming the system to empower individuals and families to make health care decisions and to control their health care dollars.”

     “It is critical that these reform efforts not lead to greater government interference in or control of the care and services available to Americans,” the report said. “Such efforts should enhance the role of choice and competition, which is at the heart of Senator McCain’s policy agenda.”

     Both campaigns have cited the Census Bureau statistics on the number of Americans without health insurance. While the candidates’ plans – and economists’ opinions of those plans – differ greatly, one thing is clear: the statistics about the uninsured in the United States are inflated.

      The Business & Media Institute reported in 2007 that the number included illegal aliens, people who were between jobs (rather than permanently unemployed and uninsured) and others who could afford insurance but chose not to purchase it.

     Turner called it “ridiculous and not true” to think that there is a “permanent underclass of the same 40-some million people that not only don’t have health insurance but have no access to the health care system whatsoever.”

      “At least 40 percent, probably more, are flowing through the employment-based system,” Turner, a Business & Media Institute adviser, said. “Because we tie health insurance so closely to the workplace in this country, many of the people have lost health insurance because they’ve lost or changed their jobs and they haven’t yet picked up coverage at their new employer, so they’re temporarily uninsured.”

     “Another probably 10 million are illegal immigrants who are not going to be addressed if we have a nationalization of our health sector,” she said. “At least 10 million of them are eligible for existing public programs, either Medicaid or the State Children’s Health Insurance Program, primarily. People who are eligible for existing programs and who are not enrolled. And another, as many as 10 million, are making $50,000 to $75,000 a year or more and could likely afford to purchase insurance.”

Obama: Read about the media’s support for big-government solutions to health care reform.

Back to the Top

   America 2012 Home  •  BMI Website                  Health Care  •  Taxes  •  Earmarks  •  Ethanol  •  Cap-and-Trade