October 07, 2008
On McCain's Health Care Plan and Tonight's Debate

The WSJ explains what McCain cannot--the advantages of his health plan and the reason that it ought to appeal to Obama. Here are a few paragraphs but read the whole thing:

Perhaps Mr. Obama is so agitated because Mr. McCain's proposal is highly progressive. The Republican wants to readjust the subsidies that Congress channels into health coverage for business so that lower- and middle-wage workers aren't shortchanged, as they are now. Currently, people who get insurance through their employers pay no income or payroll taxes on the value of the benefit. This is revenue the government forgoes to encourage certain behavior. If those losses were direct spending, the tax exemption would have cost more than $246 billion in 2007.

But all that money props up only employer-provided insurance. For reasons of historical accident and lobbying clout, individuals who buy policies get no tax benefits and pay with after-tax dollars. Mr. McCain is proposing to make the tax benefits available to everyone, regardless of how they purchase their insurance.

He would offer a refundable tax credit of $5,000 for families, $2,500 for individuals, and the benefit isn't dependent on where people work or what they earn. Some would stick with their current job-based coverage. Given the option, others -- especially the uninsured, armed with new health dollars -- would decide to buy coverage on their own. That in turn would stimulate a market for more affordable insurance.

On a related note, Sen. Obama said in tonight's debate that he believes health care is a right. This doesn't come as a surprise really, but it is fundamentally illiberal. One person's right to health care--a positive right, not a negative right--imposes a duty on other's to provide that health care. Alas, McCain's platform--including his health policy and his new scheme to buy down mortgages--isn't much (any?) better. And McCain's rambling on about a $700 billion transfer was downright painful.

Posted by E. Frank Stephenson at 11:29 PM in Economics

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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