John McCain Wants To Take Away My Health Insurance

I'm a political junkie. I love reading about every poll, every campaign ad. I am addicted to Pollster, FactCheck, Media Matters, Politico, and everything they link to. So in my early morning political junkie Internet travels, I run across a new (for me) tidbit of information. The McCain/Palin campaign has been pitching its health care plan over the last few months - a $5,000 tax credit to allow people to buy their own health insurance on an individual basis in a nation-wide insurance market.

(Now I've long been a proponent of a national health care system. Call me a Socialist, a Communist, anti-Free Market, anti-Capitalist, I don't care. There are many things the government has no business sticking its nose into. However, the developed world has run a 120-year experiment with the US as the control. How did it turn out? Well, compared to other developed countries, we spend twice as much and are toward the bottom of the pack in outcomes. Shorter life expectancy, higher infant mortality, less healthy by just about every measure.

We've even run a 40-year experiment in national health care all on our own. It's called Medicare, and pretty much anyone who isn't a conservative commentator or member of a right-wing think-tank wouldn't dream of dismantling it in favor of private insurance for our retirees. The administrative overhead of Medicare is around 2%, compared to average private insurance companies in the 15% range. Pretty good deal, even with the prescription drug giveaway of a few years back. But I digress...)

So as I'm kicking off my day, I stumble across this little nugget: As a non-family I will get a $2500 tax credit. The $5000 is only for families.

A little background on me: I've worked for the same "Small Business" (you know, the kind every politician loves to talk about as elections approach) for over 8 years. The company has been around for almost 18 years, seems to be well run, and they're pretty generous with benefits for only having about 10 people on payroll. We employees pay 50% of our health insurance premiums out of our paychecks and the company pays the other 50%. As with everyone else in the country, we've seen that amount go up about 7% to 10% per year pretty reliably over the past 8 years.

A little background on the tax code: Our employers get to write off the amount they spend on our insurance as a legitimate business deduction. Nice little tax benefit and it encourages businesses to offer insurance benefits to their employees. Given that the majority of people with insurance have it through their employers, it seems like this little bit of the tax code has been pretty effective (although the percentage has been dropping in recent years).

Here's the fun part: The McCain/Palin proposal takes away that tax break. Now I am not privy to my employer's financial statements, but despite what some people would have us think, most small businesses do not clear hundreds of thousands of dollars in profit every year. A few thousand here or there makes a big difference, and my quick math indicates that removing the insurance premium tax break will make a difference of thousands of dollars on my employer's bottom line. I think there's a very real chance that our company would have to reconsider its generous benefit package.

Okay, fine, that would hurt, but at least I'll get that $2500 to buy my own insurance on the Free Market. Except for the part where my insurance premium right now is a hair under $4800 per year. That's me, a single male, non-smoking, light-drinking vegan (i.e. zero-cholesterol diet) who has been to a doctor exactly 4 times in 15 years. I'm an insurance company's dream customer, and I'd have to find insurance for half of what it costs today. If I can't do that, I'd be out an extra $2300 this year which, as it turns out, I can't really spare right now. There doesn't seem to be any indication on McCain's website that this would be indexed to inflation, so it's probable that I'd fall even farther behind in the years following. Now hopefully our company would bump our paychecks a little to reflect that they're not paying their 50% anymore, but even if they gave us every penny of the difference, that money goes from tax deduction for them to taxable income for me, still leaving me about $700 short.

Maybe I can swing an extra $50/month or so in the direction of my favorite insurance company. I'm pretty good with money and I'm sure I can figure something to cut back on. However, the average family's health insurance costs $12,000/year. The $5000 McCain and Palin are offering families goes even less far toward covering their insurance costs than $2500 goes for me. And it's a whole lot easier for me to cut back on Netflix or my cel phone usage than it will be for them to buy less food and clothing for their kids.

If this is "Maverick" I'll gladly stick with Washington as usual.