HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Thursday, October 30, 2008

Obama Jumps on McCain Adviser's Health Remarks

The Washington Post reports that Sen. Barack Obama's presidential campaign claimed Tuesday that comments by a top adviser to John McCain reinforced Obama's contention that millions would be worse off if they lose employer-sponsored health coverage and end up buying it themselves.  Kevin Freking writes,

Obama_and_mccain2McCain wants to change the current income tax treatment of health insurance, treating payments toward health insurance as taxable wages. In exchange, individuals would get a $2,500 tax credit and families would get a $5,000 credit when buying health coverage.

Some health analysts say the Republican's plan would erode employer-based health insurance coverage by encouraging younger, healthier workers to shop around and find a better deal directly from an insurer in the individual market. And, if those workers dropped employer coverage, some companies would eliminate coverage entirely because of the costs associated with insuring older or less healthy employees.

Douglas Holtz-Eakin, a domestic policy adviser for McCain, attempted to assure that such a scenario would not occur, but gave Obama an opening.

"Why would they leave?" Holtz-Eakin said in a story published by "What they are getting from their employer is way better than what they could get with the credit."

Obama's campaign quickly seized on the comment. In remarks prepared for delivery Tuesday in Harrisonburg, Va., Obama described Holtz-Eakin's comments as a "stunning bit of straight talk, an October surprise from his top economic adviser."

"(Holtz-Eakin) said that the health insurance people currently get from their employer is and I quote 'way better' than the health care they would get if John McCain becomes president," Obama said. "Now this is the point I've been making since Sen. McCain unveiled his plan. It took until the last seven days of this election for his campaign to finally admit the truth. But hey, better late than never."

Holtz-Eakin said he was trying to say that the individual health insurance market can be improved and that McCain has offered proposals to make it better, but that the changes McCain seeks won't weaken employer-sponsored health coverage.

"The question I answered was: 'Will the young and healthy leave their generous employer-sponsored coverage as the Obama campaign claims?' My response was that, obviously, if they had better coverage, they would not change. The Obama campaign deliberately took the quote out of context. This continues their disgraceful campaign," Holtz-Eakin said.

Obama campaign officials noted that an independent analysis by the Tax Policy Center projects that McCain's plan would cause about 21 million people to buy coverage in the individual market over the next 10 years, but that 20 million would have lost or refused coverage through their employer. The Tax Policy Center is a joint project of the Urban Institute and the Brookings Institution, two think tanks.

"It's a bad deal to push people into the individual market because people pay more for less," said Neera Tanden, Obama's domestic policy director. "So what was astonishing is that Doug Holtz-Eakin basically agreed with Sen. Obama that the individual market is a worse deal."

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