McCain to Cut Medicare

John McCain's health care plan always has been a bamboozle. For starters, he has proposed imposing a new tax on the dollar value of any health insurance benefits an employer pays to its employees.

Then, his plan would 'give back' to workers a $5,000 tax credit if they buy private insurance from a locally 'unregulated' insurance company anywhere in the nation. (Currently, health insurers must meet certain state regulations that ensure companies selling health insurance policies in Florida maintain adequate reserves and write fairly priced, nondiscriminatory policies that actually cover what they claim.)

Altogether, experts estimate no more than 5 million salaried and hourly workers who are presently uninsured would obtain insurance under the McCain plan. As premiums increase, the number of newly covered workers will drop.

McCain's health care plan also would create a huge disincentive for employers to provide their workers with health insurance benefits. As most families know, moreover, $5,000 a year doesn't cover even half the annual cost of a decent 80/20 family health plan, which is now averaging $12,100 a year for a family of four. Workers with children -- never mind someone in the home with a preexisting condition -- would be left behind by McCain's market place plan.

Ezra Klein explained this almost a month ago, based on two independent analyses published in the nonpartisan Health Affairs Journal. One of them concluded:

[T[he McCain plan will not enable many more Americans to obtain health insurance--and it certainly will not achieve universal coverage. By our calculations, upward of forty million Americans would be uninsured--and that number would likely grow over time. The estimates described above focus on the initial impact of the plan. Over time, a refundable tax credit would not automatically adjust as health care costs increase--which is quite different from the current tax exclusion of employer premium payments. Thus, the effectiveness of the tax credit in inducing people to buy coverage would inevitably decline over time. Even if the tax credit were indexed to the Consumer Price Index (CPI), if the annual growth in premiums exceeded CPI-measured inflation by 6 percent--as was the case between 1999 and 2007--the value of the credit would be eroded so much that in just five years, five million more people would be uninsured.

It has always been something of a mystery, too, just how McCain proposes to pay for his minimalist health care reform. Until this week.

This week the Wall Street Journal's Laura Meckler reported that "Douglas Holtz-Eakin, Sen. McCain's senior policy adviser, said Sunday that the campaign has always planned to fund the tax credits, in part, with savings from Medicare and Medicaid."

In other words, McCain wants to "reform" health care for younger workers by imposing a tax on their employer-provided health insurance benefits, then give them a credit on income tax returns for something less than half what it will really cost them to buy an annual health insurance policy. He would pay for this minimalist program by cutting over $1.3 trillion in Medicare payments for the elderly, disabled, and poor.

Florida congresswoman Debbie Wasserman-Schultz (D-Weston) explained on the Rachel Maddow Show Monday night that the stupidity of this plan is "mind boggling." It's not only terrible policy, it's bad politics if the McCain campaign hopes to win Florida, where 3.2 million are covered by Medicare -- "the second highest number of Medicare recipients in the country."

Let's hope someone in the debate audience tonight asks the right questions: "Senator McCain, under your plan, where am I supposed to find $7,100 more every year to buy health insurance for my family? And, when you cut $1.4 trillion from Medicare, does that mean mom and dad will have to move in so they can get health insurance, too?"

Rachel Maddow and Debbie Wasserman-Schultz discuss it all: