NCPA - National Center for Policy Analysis


May 6, 2008

A gold star to John McCain for his just released plan for reforming health care.  He takes on problems that have contributed to cost escalation.  The key salvo is aimed at the central pillar of our health care system -- tax-subsidized employer-provided health care, says columnist Star Parker.

For instance:

  • About 70 percent of Americans get their health care where they work.
  • The McCain plan offers a $5,000 tax credit to families and $2,500 to individuals to purchase health care on their own.
  • McCain would further enhance competition and consumer power by ending the 50 separate state fiefdoms and allow the health care market to be open nationwide.

This would end the inherent inequity of some getting tax-free health care from their employers, but others having to purchase it with after-tax dollars.  Aside from the inequities, the employer-based system has also been an engine for driving up costs.

For example:

  • The higher your income and tax bracket, the more you're subsidized for your health care.
  • As a result, consumer power and responsibility are slighted.

In what other marketplace would you have the equivalent of a doctor prescribing a test and the patient not even thinking to ask if it's necessary or how much it costs?  According to David Gratzer of the Manhattan Institute:

  • The individual out-of-pocket portion of health expenditures dropped from 42 percent in 1960 to 14 percent in 2002. 
  • Meanwhile, per capita health care spending more than quintupled.

Hillary Clinton and Barack Obama can't grasp that our perverse health care economics result from over-centralization, so they propose even more.  They propose to lower costs through subsidies financed by massive tax increases.

McCain's approach will use markets and consumer power to drive down costs and open the door to innovation.  Issues remain, but McCain has gotten this debate off on the right note, says Parker.

Source: Star Parker, "His Health Care Plan Also Makes Most Sense," Boston Herald, May 5, 2008.

For text: 


Browse more articles on Health Issues