John McCain's Health Plan: Tax Hike and Insurance Boondoggle

2-26-08, 9:05 am



'How about a thousand years of affordable health care?,' asks Iraq war veteran Rose Forrest in a new TV ad produced by in response to presumptive Republican presidential nominee John McCain's recent statements suggesting he didn't care if US troops stayed in Iraq for that period of time.

McCain's critics argue that his support for out-of-control spending on an endless occupation of Iraq, about $10 billion per month and already surpassing $1 trillion, compares unfavorably to his role in the Senate in blocking a $5 billion expansion of the State Children's Health Insurance Program (S-CHIP) for the children of working families who cannot afford health insurance.

The VoteVets.org ad goes on to demand McCain commit to America's working families rather than Iraq, wondering whether or not McCain has 'already promised to spend trillions in Baghdad.' VoteVets.org is a veterans organization dedicated to electing Iraq and Afghanistan veterans to public office who advocate veterans issues and seek the the speedy end of the wars.

Veterans aren't the only ones questioning McCain's health care policies. In a recent post to its blog, the AFL-CIO also sharply criticized McCain's proposals on health care. Essentially, McCain wants to treat employer-sponsored health benefits as part of taxable income. That idea would likely impose a massive tax increase for working families totaling about $1 trillion over the four years of a McCain presidency, according to an estimate OMB.

The AFL-CIO post stated that McCain's proposal 'would make health care even more out of reach for most of us.' The plan would specifically harm union members who have won good health care benefits through collective bargaining.

'An employee whose health benefits are worth $15,000,' argued the AFL-CIO post, 'would have to pay taxes on an extra $15,000 in income.'

The McCain campaign insists that its proposed tax hike would be offset by tax credits given to individuals who purchase insurance. But a study by the Kaiser Family Foundation reveals that McCain's proposed tax credits would cover less than half of the average cost of a health insurance premium.

If passed, McCain's plan would create an incentive for employers to dump health care benefit plans and push workers into the private health insurance market on their own where most would find paying premiums impossible.

While Republican 'free market' ideology of profits over health are at the heart of McCain's proposals, recent reports of McCain's long-standing and deep ties to Washington lobbyists also explain his motives.

One of McCain's top campaign advisers is former Republican member of Congress Thomas Loeffler. Loeffler now runs the lobbying firm The Loeffler Group whose clients include the cash-rich and immensely powerful pharmaceutical lobbying group Pharmaceutical Research and Manufacturers of America (PhRMA). PhRMA donates millions to congressional campaigns and has spent tens of millions of dollars to block health care proposals that would make access more affordable.

Notably PhRMA spent about $22 million in 2007 successfully lobbying Congress and John McCain to block several health care reform proposals offered by Democrats, according to the Kaiser Family Foundation.

One bill, endorsed by senior groups like the labor-affiliated Alliance for Retired Americans, would have allowed the federal government to negotiate prices directly with pharmaceutical companies under the Medicare prescription drug benefit and legislation. The intention of this proposal was to make lower-cost drugs imported from Canada more widely available and expose domestically produced drugs to greater competition. The aim was to keep prescription drug prices from continuing their faster-than-inflation growth.

Republicans filibustered the proposal last April. John McCain failed to show up for the vote. In 2007, prescription drug prices grew by almost 8 percent, or close to twice the rate of inflation. Pharmaceutical corporations represented by PhRMA continue to make record-breaking profits of people's illnesses.

--Reach Joel Wendland at