Obama attacks 'radical' McCain health plan

Obama, in prepared remarks for his Newport News, Va., speech, broadens an attack on McCain's healthcare plan that has been building for days.

He'll say:

So here’s John McCain’s radical plan in a nutshell: he taxes health care benefits for the first time in history; millions lose the health care they have; millions pay more for the health care they get; drug and insurance companies continue to profit; and middle class families watch the system they rely on begin to unravel before their eyes. Well, I don’t think that’s right. I don’t think we should settle for health care that works better for drug and insurance companies than it does for hard working Americans. I don’t think that’s the change we need. We can do better than that.



There are serious academic disputes about some of McCain's proposals, including whether his shift to taxing health benefits would really force companies to drop care, and how many. Conservatives also argue that taking away the patchwork of state regulations — which are largely aimed at forcing insurers to cover specific conditions and treat their customers in certain ways — would lower costs.

But McCain has stepped onto dangerous political turf with a plan that promises to change the way every American gets health care, including people who are happy with their current care.

And it's striking that the GOP hasn't yet responded, on TV or in a detailed policy argument, to an attack that first became clear when Obama went up with health care ads in English and Spanish days ago, and which his campaign has been telegraphing quite clearly for more than 24 hours.

Full excerpts, and the Obama camps memo, after the jump.

UPDATE: McCain puts out a statement from a spokesman and a few bullet points that contest the notion that most Americans will see a tax hike, rather than a cut, but doesn't engage the threat that 20 million would lose coverage.

“It’s a bald-faced lie because John McCain will improve the tax code so that middle-class paychecks aren’t used to pay government bureaucrats but instead will pay for the access to health care Americans deserve. Barack Obama, the most liberal member of the U.S. Senate, has a different plan: higher taxes, a trillion dollars in new spending, and a radical turn toward government-run health care that promises to be as efficient as a trip to the DMV," said McCain-Palin spokesman Tucker Bounds.

Excerpts from Obama's speech today.

Senator McCain has been eager to share some details of his plan – but not all.

He tells you that he’ll give you a tax credit of $2,500 per person — $5,000 per family — to help you pay for your insurance and health care costs. But like those ads for prescription drugs, you have to read the fine print to learn the rest of the story.

You see, Senator McCain would pay for his plan, in part, by taxing your health care benefits for the first time in history. And this tax would come out of your paycheck. But the new tax credit he’s proposing? That wouldn’t go to you. It would go directly to your insurance company — not your bank account. So when you read the fine print, it’s clear that John McCain is pulling an old Washington bait and switch. It’s a shell game. He gives you a tax credit with one hand — but raises your taxes with the other.

* * * *

And here’s something else Senator McCain won’t tell you. When he taxes people’s benefits, many younger, healthier workers will decide that it’s a better deal to opt out of the insurance they get at work — and instead, go out into the individual market, where they can buy a cheaper plan. Many employers will be left with an older, sicker pool of workers who they can’t afford to cover. As a result, many employers will drop their health care plans altogether. And study after study has shown, that under the McCain plan, at least 20 million Americans will lose the insurance they rely on from their workplace.

It’s the same approach George W. Bush floated a few years ago. It was dead on arrival in Congress. But if Senator McCain were to succeed where George Bush failed, it very well could be the beginning of the end of our employer-based health care system. In fact, some experts have said that that’s exactly the point of John McCain’s plan — to drive you out of the insurance you have through your employer — and out into the marketplace, where your family will be given that $5,000 tax credit and told to buy insurance on your own.

A $5,000 tax credit. That sounds pretty good. But what Senator McCain doesn’t tell you is that the average cost of a family health care plan these days is more than twice that much — $12,680. So where would that leave you?

* * * *

Finally, what John McCain doesn’t tell you is that his plan calls for massive deregulation of the insurance industry that would leave families without the basic protections you rely on. You may have heard about how, in the current issue of a magazine, Senator McCain wrote that we need to open up health care to — and I quote — “more vigorous nationwide competition as we have done over the last decade in banking.” That’s right, he wants to deregulate the insurance industry just like he fought to deregulate the banking industry. And we’ve all seen how well that worked out.

* * * *

So here’s John McCain’s radical plan in a nutshell: he taxes health care benefits for the first time in history; millions lose the health care they have; millions pay more for the health care they get; drug and insurance companies continue to profit; and middle class families watch the system they rely on begin to unravel before their eyes. Well, I don’t think that’s right. I don’t think we should settle for health care that works better for drug and insurance companies than it does for hard working Americans. I don’t think that’s the change we need. We can do better than that.

* * * *

…I reject the tired old debate that says we have to choose between two extremes: government-run health care with higher taxes…or insurance companies without rules denying people coverage. That’s a false choice. It’s the same distracting rhetoric that’s kept us gridlocked for decades. And we know that neither of these approaches is the answer to this problem.

The real solution is to take on drug and insurance companies; modernize our health care system for the twenty-first century; reduce costs for families and businesses; and finally provide affordable, accessible health care for every American.



MEMORANDUM

Saturday, October 4, 2008



TO: Interested Parties

FR: Obama-Biden Campaign

RE: Five Pitfalls of the McCain Health Plan

FIVE PITFALLS OF THE MCCAIN HEALTH PLAN

John McCain’s “radical” health care plan will undermine the health care that millions of Americans have come to rely on, and while shifting costs onto individuals and hurting the budgets of working families. In five crucial areas the McCain plan will make America’s already fragile health care system worse, making it more difficult to solve our nation’s health crisis.

1. Pays for a New Tax Credit by Taxing Employees’ Health Benefits for the First Time in History. John McCain and Sarah Palin argue that their health care plan is budget neutral, and that it includes a new $5,000 health care tax credit to help families purchase insurance. What they don’t tell you is that to pay for their plan, they will tax the health benefits that workers receive from their employers for the first time in history. Moreover, McCain’s health care tax credits would go directly to insurance companies, while his new tax on employee health premiums would come directly out of workers’ pockets. This tax punishes those who currently have generous health insurance, and over time will result in higher taxes for tens of millions of middle-class families.

· OBAMA PLAN: Offering tax credits to make health care affordable for all Americans, without imposing a new tax on employer health benefits. Barack Obama’s health care plan is fully paid for by reducing health care costs, eliminating overpayments to HMOs and rolling back a portion of the Bush tax cuts for families making over $250,000 per year.

2. Forces at least 20 million people to lose employer-based coverage. By taxing employee health benefits, the McCain plan will make it more expensive for employers to provide coverage. As a result, independent analyses show that employers will drop at least 20 million people from coverage and force them to seek insurance in the individual market, where costs are higher, quality is lower, and coverage more uncertain. By moving more risk upon the shoulders of individuals, it raises insurance costs for everyone nationally.Thi And by forcing millions into the individual market, people with pre-existing conditions from asthma to cancer will be at risk of not being able to get health insurance at all.

· OBAMA PLAN: Building upon the employer based health-insurance system by letting workers keep the health insurance they have or to purchase a different plan in a new pool that ensures quality and affordable coverage.

3. Undermines the ability of people who do have coverage to get services from cancer screenings to vaccines. The McCain plan undermines state laws that require insurance companies to cover bedrock health care services such as cancer screenings and vaccines. The plan empowers insurance companies over doctors and nurses, while making America less healthy. In fact, John McCain recently explained his intention to deregulate health insurance along the lines that the banking industry has been deregulated over the past decade.

· OBAMA PLAN: Protecting existing state regulations and increasing protections for American families by requiring health insurance companies to cover all Americans regardless of health status and outlawing unreasonable rate and fee increases.

4. Fails to take on rising health care costs. The McCain plan has no strategy to contain spiraling national health care costs. Without the aggressive investments needed to modernize our health care system, a recent analysis concluded that McCain’s plan could actually increase health care costs by $37 billion by 2010.

· OBAMA PLAN: Bringing down health care costs by $2,500 per year, per family, through aggressive investments in health information technology, chronic care management, comparative effectiveness research, and an emphasis on prevention.

5. Fails to address the crisis of the uninsured. The McCain health plan does not even attempt to solve the problem of the uninsured — it barely reduces the number of uninsured individuals, and it leaves those with preexisting conditions at the greatest risk of being unable to find affordable coverage. This lack of commitment to ensuring affordable coverage for all Americans is consistent with McCain’s record, including his vote last fall against funding the State Children’s Health Insurance Program (SCHIP) that would have extended coverage to 3.8 million children.

· OBAMA PLAN: Ensure that every single American can purchase quality, affordable healthcare, so that no American is uninsured.

In all these respects the McCain health plan represents a continuation of the policies we have seen over the last eight years, policies that have contributed to health premiums more than doubling, 7 million more Americans uninsured, and nearly 2 million more Americans without employer sponsored insurance.

---

Please see our campaign’s response to Barack Obama’s statements today in Newport News, Virginia. In his prepared remarks as planned for delivery, Barack Obama lies about John McCain’s health care plan claiming it is a plan to tax health care:

“Barack Obama is lying to voters. It’s a bald faced lie because John McCain will improve the tax code so that middle class paychecks aren’t used to pay government bureaucrats but instead will pay for the access to health care Americans deserve. Barack Obama, the most liberal member of the U.S. Senate, has a different plan: higher taxes, a trillion dollars in new spending, and a radical turn toward government-run health care that promises to be as efficient as a trip to the DMV.” — Tucker Bounds, spokesman McCain-Palin

Obama’s Lie About The McCain Health Care Plan:

Obama Says John McCain “Taxes Health Care Benefits.” Obama: “He taxes health care benefits for the first time in history; millions lose the health care they have; millions pay more for the health care they get; drug and insurance companies continue to profit; and middle class families watch the system they rely on begin to unravel before their eyes” (Barack Obama’s Prepared Remarks In Newport News, VA, 10/4/08)

The Facts: The Obama Campaign Has “Mischaracterized” McCain’s Health Care Proposal As It Totally Leaves Out McCain’s Health Care Tax Break, Obama-Biden Attacks Called “Wrong,” As Middle Class Families Will See Their After-Tax Incomes Rise

Michael Dobbs, Washington Post Fact Checker: “Joe Biden Mischaracterized McCain’s” Health Care Plan. “Joe Biden mischaracterized McCain's proposal for giving Americans a tax credit to pay for their own health insurance programs in return for taxing the health benefits they receive from employers. He suggested that the average American family would lose around $7,000 on the deal, receiving a $5,000 tax credit in return for having to pay $12,000 for their own health care program. In fact, the non-partisan Tax Policy Center has calculated that most American families would come out slightly ahead for the next decade at least.” (Michael Dobbs, “Vice Presidential Debate: St. Louis,” Washington Post Fact Checker, 10/2/08)

The Associated Press: Obama-Biden Campaign Is "Wrong" In Their Health Care Attacks. "Joe Biden charged Thursday during a campaign stop in Pennsylvania that John McCain's tax proposals for health insurance would be 'the largest tax increase in the history of America for the middle class.' He was wrong." (Kevin Freking, "Biden Misleads With Accusation Of Tax Increase," The Associated Press, 9/26/08)

The Obama-Campaign Leaves Out "That McCain Also Proposes To Give The Insured A New Tax Break." "So, as Biden explained, someone who makes $40,000 and gets $12,000 in health insurance benefits would end up paying income taxes on $52,000. But what Biden didn't say was that McCain also proposes to give the insured a new tax break in exchange — a $2,500 tax credit for individuals and a $5,000 tax credit for families." (Kevin Freking, "Biden Misleads With Accusation Of Tax Increase," The Associated Press, 9/26/08)

A Middle Class Family Under John McCain's Plan Would See Their After-Tax Income Rise. "To take Biden's comparison one step further, consider his $40,000 family whose insurance cost $12,000. That family is in the 15 percent tax bracket. So, multiplying that additional $12,000 in income by 15 percent means that the family in Biden's example currently gets an $1,800 federal income-tax break. McCain's tax break for that family would be $5,000." (Kevin Freking, "Biden Misleads With Accusation Of Tax Increase," The Associated Press, 9/26/08)

· Tax Policy Center: "But Low- And Middle-Income Workers Would Still See A Rise In After-Tax Income.""By 2018, high-income households would be worse off under McCain's plan than they would have been under current law because the credit would be worth less than the current tax exclusion. But low- and middle-income workers would still see a rise in after-tax income, the center projected." (Kevin Freking, "Biden Misleads With Accusation Of Tax Increase," The Associated Press, 9/26/08)