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.
Consumers could then use that cash to buy their own insurance in what Gramm foresees as a vibrant, consumer-driven marketplace for healthcare packages.
By contrast, Clinton and Obama want to leave the employer-based system in place; Clinton would make big companies either fund gold-plated packages for workers, or pay a stiff tax to support a new Medicare-like system. The Democrats wouldn't allow insurers to charge lower rates for young workers who cost far less than older Americans. McCain favors allowing insurers to charge rates based on actual cost. Gramm adamantly supports that policy allowing insurers to tailor their premiums, and their packages, to their customers. Says Gramm: "Most people without coverage are young and healthy. We shouldn't penalize them by forcing them to pay for someone else's coverage."
The plan as it is outlined on his website is pretty much as it is described in the Fortune article.
The idea is to somehow "reduce cost," apparently through the magic of the marketplace -- exactly how it will do so isn't discussed. Give people a few thousand dollars a year in tax credits, and somehow costs will come down. No mention of what will happen with older people who aren't yet old enough for Medicare, whose premiums could be far more than $5,000 when they can get policies at all; no mention of people with pre-existing conditions or who are otherwise poor risks for insurance companies. The idea seems to be to "reduce cost" by simply excluding the old and the sick from the healthcare system entirely, or else to stick them on Medicaid, which is already falling apart at the seams, and which has strict income requirements. In other words, the plan does nothing to solve the problems of our current system.
Such a plan has no chance of passing anywhere. As soon as older people -- a tremendously powerful voting bloc -- saw what could happen to them under this plan even Republicans would run away from it. The plan actually exists to say "I've got a plan, too" and to provide a contrasting basis for attacking any Democratic plan along the usual lines of "big government/socialized medicine/nanny state/tax and spend" lines. It exists to perpetuate the status quo. And McCain will get away with it, because no one will call his hand. The Dem plans have been examined and debated and yelled at since before they had even rolled them out; this is the first time I've seen a single word about McCain's, or any Republican's. And I'm willing to bet an insurance premium or two it will be one of the last.
