NCPA - National Center for Policy Analysis


October 8, 2008

For decades, the percentage of Americans who get their health insurance at work has been shrinking.  Today, only 59 percent of Americans get their health insurance through the workplace, and 20 years ago, 75 percent of us did.  With costs skyrocketing, the current path we are on is not sustainable.  John McCain's proposal -- to give every American the tax credit businesses get for buying health insurance -- is the right prescription for what ails our health-care system, says Dr. David Gratzer, a physician and senior fellow with the Manhattan Institute.

To be clear, McCain does not want to scrap employer-based insurance all together; he would keep part of the tax deduction in place.  But he wants to fundamentally change the way the system works and instead give the self-employed and individuals a tax break for buying their own insurance.

There are several advantages to this approach, says Gratzer:

  • Under McCain's proposal, families could opt out and join another health insurance plan -- perhaps offered by their church, union or trade association -- if it better suits their needs than their employer-financed plan.
  • Presently, changing jobs means changing health plans and, often, family doctors; it also means that if a worker loses his job, he can also lose his health insurance.
  • Under McCain's plan, job status wouldn't necessarily affect health coverage.
  • By freeing workers of the need to stay in a job to keep their health insurance, McCain's plan would help create a more flexible workforce.
  • A study by University of Wisconsin found that 20 percent to 30 percent of nonelderly men worry enough about losing their health benefits that they stay in jobs they would otherwise leave.

Opponents say that McCain's plan has its flaws, but overall, he is fundamentally right, says Gratzer.  Even Obama adviser David Cutler has noted "health insurance is not something that is made better by tying it to employment."

Source: David Gratzer, "McCain Is the Real Health-Care Reformer," Wall Street Journal, October 7, 2008.

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