McCain’s Healthcare “Revolution:” Blind Faith in a Deregulated Free Market

Fortune Magazine touts McCain’s healthcare proposal as revolutionary.  Here is the descripion:

Today, McCain is advocating a plan that’s radically different from those of Clinton and Barack Obama, and – if he goes all the way by following Gramm – could revolutionize America’s healthcare system. For McCain and Gramm, the problem with our healthcare system – and the reason why over 47 million Americans are uninsured – is that it’s excessively, scandalously expensive. The solution, they say, is to let Americans shop for healthcare with their own money. McCain advocates giving tax rebates of $2500 per individual or $5000 per family. With that money, families could purchase policies on their own. What’s truly radical about the plan is that it eliminates the tax exclusion for healthcare benefits offered by companies to their employees, and replaces it with the $2500 to $5000 rebates.

He thinks a tax rebate will solve the problem.  That and taking away the tax incentive for employers to provide insurance. This will clearly help business as it will have an excuse not to provide insurance to employees.  But will the employees really be benefited?  This is certainly an expression in blind faith in the free market, something that McCain is now backtracking on.

His proposal certainly won’t help the poorest people who don’t pay more than $5000 in taxes.  But I wonder if this blind faith in free market economics is well-founded.  Should we now bet people’s lives that somehow the prices will come down if everyone has to buy their own insurance and group rates are no longer available?  I wonder if they have ever shopped for insurance?

I think there’s a wolf in grandma’s bed here.  The only sector to clearly benefit will be business.  The citizens will be throw to the free market wolves.

Here’s a comparison of Obama’s plan with that of McCain.  Note that McCain’s plan includes, not only what was decribed by Fortune Magazine, but the deregulation of the insurance companies.  It is a tough time to be singing the merits of deregulation.

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