McCain Seeks Tax Credit for Buying Health Insurance

April 29, 2008
TAMPA, Fla. — -- Presumptive Republican nominee John McCain added a new element to his health insurance plan Tuesday, proposing to work with states to find a suitable plan to help individuals with chronic health conditions who might have difficulty finding insurance in a private market.

The plan, which the Arizona senator's campaign calls a "guaranteed access plan," is designed as a type of last-resort health insurance for people who cannot get coverage. McCain's campaign said that the details surrounding the cost of the plan and how many people it would help needed to be worked out, but that federal money would be used to support to that system. Some 40 million people in the United States are currently without health insurance.

"Those with pre-existing conditions do have the most difficulty on the individual market, and we need to make sure they get the high-quality coverage they need," McCain said.

McCain's health care plan -- which, according to senior policy adviser Doug Holtz-Eaken, will continue to evolve and develop over the course of the campaign -- was originally laid out last October.

"Remember, it is April, and the election's November, so not everything will happen tomorrow or this week," said Holtz-Eaken.

The main focus of the plan is to get more Americans to buy insurance themselves instead of receiving benefits through their employers. It would restructure the tax benefits provided to employers and employees, giving them money to purchase coverage in a private market.

McCain's plan would provide $2,500 in tax credits per individual or $5,000 per family to purchase insurance. Those credits are refundable, meaning that even low income Americans who may not pay that much in taxes would receive the money.

Everyone would get the same amount of money from the government to purchase insurance.

"The goal is to level the playing field," Holtz-Eaken said.

McCain would pay for the tax credits by eliminating the financial incentives employers currently get from the government when they provide insurance for their employees.

The McCain campaign said individuals would have the option of keeping their current employer-provided insurance, or switching to the individual system.

Critics said that reducing the tax break companies get would cause employers to end their programs entirely.

McCain's plan would also allow consumers of health insurance to buy it across state lines to increase competition among providers. Critics say that would gut state insurance requirements. For example, some states require that insurance companies provide preventive tests, while others do not.

McCain also focuses on "wellness and fitness" to lower the overall cost of preventable diseases.

"We need to adopt new treatment programs and financial incentives to adopt health habits, for those with the most common conditions such as diabetes and obesity, that will improve their quality of life and reduce the costs of their treatment," McCain said.