9-27-08, 9:40 am

As many as 27 million American workers can expect to lose their employment-sponsored health care benefits if John McCain's health care proposals become law, a new report by the Economic Policy Institute's Policy Center showed this week.

The main element of McCain's health plan that would cause this dramatic loss of health care benefits is a proposal to eliminate the tax incentive employers get for providing health insurance to their employees. In fact, McCain would impose taxes on health care benefits, which will cause employers to be less likely to offer them and force workers and their families to seek benefits alone in the insurance market.

According to the report, 'A large share of those losing employer coverage will have no choice (absent being uninsured) other than to seek coverage in the individual market.' Because larger risk pools, such as those created in the employment-sponsored system, would no longer exist, premiums are likely to be higher, along with higher out-of-pocket expenses and deductibles. In such a system, the report suggests, individuals in the private insurance market are less likely to be able to afford the same coverage they would get in an employment-based plan.

'This part of the McCain proposal makes it more expensive for employers to provide health coverage to their employees, so we will see more of them dropping this benefit,' explained Elise Gould, one of the authors of the report. 'Many employees and their families will be forced into the individual market, where high-quality plans are harder to obtain, especially for those who are not young and healthy.'

Since 2000, the employment-based health care system has shrunk by more than five percent, according to the report. In its state-by-state analysis, the EPI report estimates that New York would see about 1.6 million people kicked of the employment-sponsored insurance rolls. California, as many as 2.4 million.

But the big states won't be the hardest hit. More than 14 percent of Kansans would likely lose their health care benefits as a result of John MCCain's plan. Connecticut and Washington, DC would see an even higher proportion, as would Vermont and Rhode Island, according to the estimates put forward in the report.

Voters in battleground states like Michigan might be interested to learn that under John McCain's plan, almost three-quarters of a million of them could lose their job-based health benefits. About 375,000 people in Indiana could find themselves scrambling to find affordable health care coverage on the individual private insurance market. Three-quarters of a million people in Florida and almost 1 million Ohioans could lose their benefits if John McCain wins the White House, according to data provided by the Economic Policy Institute.

“It’s hard to think of any other change that could do more harm than this one to a health care system that’s already weakened,” commented co-author Josh Bivens. “It will cost millions of Americans their current employer-based health insurance, and it provides no alternative source of coverage that matches the protections offered by employer plans.”