McCain's health plan taxes employer provided healthcare benefits for the first time in history and to offset those higher taxes provides a tax credit.
The candidates concentrate on the portion that plays better to their campaigns. McCain only mentions the tax credit, while Obama mentions mostly the tax increase.
However, there are other important consequences to consider:
If employees would be taxed under McCain's plan, so the employers. Employee health benefits woudnt be a tax deductible business expense anymore.
Would this be final incentive for employers start dropping their employer provided health programs?
Also, if healthy people start dropping themselves from their employer's health plans due to the tax credit, that would leave only the sicker people in the plans increasing the cost of those plans forcing employers to drop the plans completely.
If employers drop their plans how will employees with pre-exixtent conditions manage in the individual health insurance market?
The latest survey shows the average cost of a family health insurance policy in about $12,000/year. Mccain's proposed tax credit for families is only $5,000
