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Sorting out the truth on health care

In print: Sunday, October 12, 2008

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Half that for 'every American'

The statement

"I want to give every American a $5,000 refundable tax credit."

John McCain, Tuesday in a debate in Nashville. The ruling

It's actually half that: $2,500 for singles and $5,000 for couples. The tax credit is part of McCain's health proposal, which seeks to increase competition for health care by reducing reliance on employer-provided health insurance. Most Americans who have health insurance get it through their employer. McCain's idea is that people should be able to go out on the open market and buy their own health insurance, and not be pushed into an employer-provided insurance plan by tax incentives. So under McCain's plan, the tax exemption for employer-provided health insurance would disappear, and people would get a tax credit to spend on any health insurance they wish. They might choose to use their employer's plan and use the tax credit to offset the new tax on the benefit, or they might go off and buy insurance on their own. Another caveat about McCain's tax credit: You can't get cash for it. To ensure that it goes to health care, the credit is payable directly to insurance companies. Any remainder would go into a special health spending account. McCain would be accurate if he had said $5,000 per family, but his statement in the debate takes things too far. It's $2,500 for single people. We rate his statement Half True. Obama's plan expands existing system

The statement

Under Barack Obama's health care proposal, "if you've got a health care plan that you like, you can keep it."

Barack Obama, Tuesday in a debate in Nashville. The ruling

Opponents have attacked Obama's plan as "government-run" health care, but he's accurately describing the plan here. He advocates a program that seeks to build on the current system, rather than dismantling it and starting over. Obama's plan essentially takes today's system and seeks to expand it to the uninsured. It creates national pools for individuals to buy their own cheaper insurance. It increases eligibility for the poor and children to enroll in initiatives like Medicaid and the State Children's Health Insurance Program. And it has several strategies to reign in costs for everyone, such as streamlining medical recordkeeping and emphasizing preventive care. Obama has said he would like his plan to be universal, in that everyone has health care coverage. But currently it includes a mandate only for children. Obama has said that he did not include a mandate for adults so as not to penalize people with modest incomes. It remains to be seen whether Obama's plan will actually be able to achieve the cost savings it promises for the health care system. But people who want to keep their current insurance should be able to do that under Obama's plan. His description of his plan is accurate, and we rate his statement True.

Small businesses exempt from plan

The statement

Barack Obama's health care plan calls for "mandates and fines for small businesses."

John McCain, Tuesday in a debate in Nashville. The ruling

Obama's plan expands health care coverage for those who don't have it by a number of strategies, such as creating national pools for individuals to buy insurance. It increases eligibility for the poor and children to enroll in initiatives like Medicaid and the State Children's Health Insurance Program. And it aims at reining in costs for everyone by streamlining medical recordkeeping and emphasizing preventive care. Obama's plan does not mandate coverage, except for children. Obama said often during the Democratic primary that he did not include a mandate for adults so as not to penalize people with modest incomes. If there's a mandate on anyone to purchase health care, it would be on parents, not small businesses. Obama's plan says that employers who don't offer their employees insurance will be required to contribute to the national pool. Obama's plan exempts small businesses from contributing to the pool. McCain calls this a "fine," but being required to contribute to a pool is not the same as paying a penalty for some wrongdoing. So even by a generous definition, Obama does not fine "small businesses." Indeed, they are not even subject to the mandate. We rate McCain's claim False.

Health care ad is right — until the end

The statement

John McCain's health care plan "leaves you on your own to pay McCain's health insurance tax."

Barack Obama, Oct. 3 in a TV ad

The ruling

McCain proposes repealing the long-standing tax exemption on employer-provided insurance. But in exchange, he proposes a tax credit of $2,500 per person to spend on any health insurance they wish. They might choose to use their employer's plan and use the tax credit to offset the new tax on the benefit, or they might go off and buy insurance on their own. Ideally, this will increase competition among health care plans. The tax credit is payable to insurance companies as a way of ensuring that people use it to buy health insurance. Any extra money would go to a special health care spending account. There's ample evidence that the plan would be a wash for most workers. The McCain campaign says only those with "gold-plated" coverage would do worse. An analysis from the nonpartisan Urban Institute confirms it: "In general, lower-income people with health insurance would receive benefits from the credit that would be well in excess of the value that they receive from today's tax exemption." So McCain's health plan does not leave you "on your own" to pay a health insurance tax. His plan gives you a credit to work with. We rate Obama's statement Barely True.

Their past positions and their plans

John McCain

• Ends the longtime tax exemption on employer-provided health insurance and replaces it with a $2,500 credit. This move aims to create more competition among health insurance providers and improve efficiency.

• Will ask the states to help create coverage plans to insure those with pre-existing conditions. Promotes electronic recordkeeping and greater access to preventive care.

BARACK OBAMA

• Workers who like their health care plan keep their coverage. Other can buy affordable coverage through national pools.

• Increases eligibility for the poor and children to enroll in initiatives like Medicaid and the State Children's Health Insurance Program. Also promotes electronic recordkeeping and preventive care.

analysis

Independent groups like the Commonwealth Fund found that McCain would cover an additional 2-million of the uninsured, while Obama would cover an additional 34-million. By 2018, McCain's plan would cost $1.3-billion; Obama's plan would cost $1.6-billion. "Obama's proposal for mixed private-public group insurance … has greater potential to move the health care system toward high performance than does McCain's proposal to encourage individual market coverage through the use of tax incentives and deregulation," its report concludes. For the report, go to http://tinyurl.com/4j7uuv