Dallas, Tex. – The Cornyn-McCain health tax plan is a back door way to dismantle the employer-based health care system that Texas families just can’t afford, said the Rick Noriega campaign today.
Most Texans with health insurance through their employers enjoy mostly tax free benefits. Cornyn’s scheme treats these benefits like wages making them subject to income and payroll taxes. Under the Cornyn scheme, the majority of Texans would be paying higher taxes, paying more for less coverage, and employers would lose incentives to offer health insurance to their employees
John Cornyn told reporters at the Republican National Convention, “There’s no reason today to have health insurance policies tied to employers.”
Most Americans obtain their health insurance through their employer. But skyrocketing costs have already made it difficult for employers to offer, and employees to afford, benefits. The number of Americans with employer coverage dropped to 177.4 million in 2007, down from 179.4 million in 2000. The Cornyn scheme would eliminate the tax benefit that encourages employers to provide health coverage, destroying the employer-based system on which 11 million Texans (53 percent) rely, making Texas’ uninsured problem even worse.
“What’s truly stunning is how out of touch with Texas families John Cornyn is. Not one single family would have greater access to health care under the Cornyn plan. It’s a shame that in the state where 45% of the residents are uninsured for at least part of the year, John Cornyn tells Texas families ‘you’re on your own’ with the insurance companies,” said Holly Shulman. “Cornyn thinks forcing Texas families to fend for themselves in the individual insurance market is better than the employer based health care system. But people don’t choose to be sick like they choose to buy a car or a pair of shoes.”
JOHN CORNYN TOUTS RADICAL HEALTH TAX SCHEME TO DESTROY EMPLOYER-BASED HEALTH CARE SYSTEM
The McCain/Cornyn Plan Claims To Provide Choices Outside Employer-Based Coverage. According to John McCains health care plan, “While still having the option of employer-based coverage, every family will receive a direct refundable tax credit – effectively cash – of $2,500 for individuals and $5,000 for families to offset the cost of insurance. Families will be able to choose the insurance provider that suits them best and the money would be sent directly to the insurance provider. Those obtaining innovative insurance that costs less than the credit can deposit the remainder in expanded Health Savings Accounts.” [John McCain.com, accessed 6/18/08]
· FACT: Cornyn/McCain Credit Would Not Come Close To Covering Most Families’ Needs. According to Knight Ridder, “Kenneth Thorpe, a noted health economist, [said] two-thirds of uninsured Americans would require higher tax credits to pay for family coverage…which averages $12,000 a year…$4,500 for individuals.” [Knight Ridder Washington Bureau, 6/10/08]
· FACT: McCain/Cornyn Scheme Would Represent A MASSIVE TAX INCREASE ON MIDDLE CLASS TEXANS. “Today, workers with health insurance through their jobs enjoy largely tax-free benefits. McCain’s plan treats these benefits like wages, making them subject to income and payroll taxes, and creates a new tax credit for insurance premiums worth $2,500 for individuals and $5,000 for families. McCain’s new tax credit grows only at the rate of inflation (about 2 percent a year), while current tax subsidies keep up with health insurance premiums (about 7 percent a year). As a result, the value of the tax credit quickly falls behind rising health care costs, meaning most households with employer coverage today would soon see a tax increase. Families earning $40,000, for example, would receive a small tax cut in 2009, but by 2018 they will be paying over $2,800 more a year in taxes.” [Center for American Progress Action Fund, Analysis of McCain Plan 07/02/08]
Cornyn/McCain Plan Would Supposedly Encourage Families To Obtain Their Own Coverage. According to John McCain’s health care plan, “We want a system of health care in which everyone can afford and acquire the treatment and preventative care they need. Health care should be available to all and not limited by where you work or how much you make. Families should be in charge of their health care dollars and have more control over care.” [JohnMcCain.com, accessed 6/18/08]
· FACT: U.S. Census Bureau: Employer-Sponsored Coverage is Eroding. Most Americans obtain their health insurance through their employer. But skyrocketing costs have made it difficult for employers to offer, and employees to afford, benefits. The number of persons with employer coverage dropped to 177.4 million for all Americans in 2007, down from 179.4 million in 2000. The rate of employer coverage, at 59.3 percent for all Americans in 2007, is down from 64.2 percent 2000. Yet 37 million (or 81 percent) of the uninsured were employed in 2007. [U.S. Census Bureau 8/28/08]
· FACT: McCain/Cornyn Plan Would Force Patients To “Buy Health Insurance On Their Own.” McCain’s healthcare plan is an attempt to force patients to “buy health insurance on their own instead of receiving it from their employers.” [New York Times, 5/1/08]
· FACT: McCain/Cornyn Plan “Would Seek To Lure Workers Away From Their Company Health Plans.” While describing the health care plan proposed by John McCain, The Washington Post wrote, “McCain’s prescription would seek to lure workers away from their company health plans.” McCain would provide families with a $5,000 tax credit to purchase their own health insurance on the free market. [Washington Post, 4/30/08]
· FACT: McCain/Cornyn Plan Would Remove Incentives For Employers To Provide Health Insurance. According to the New York Times, McCain’s health care plan calls “for eliminating the tax breaks that currently encourage employers to provide health insurance for their workers.” They added that, “His proposal to move away from employer-based coverage was similar to one that President Bush pushed for last year, to little effect.” [New York Times, 4/30/08]
· FACT: McCain/Cornyn plan would cost $20 billion in new administrative costs. A Center for American Progress study found that Cornyn’s plan to shift coverage from the group market to the individual market could generate as much as $20 billion in new administrative costs (a 20% increase). [Center for American Progress, 5/08]
McCain/Cornyn Plan Says It Would Ensure Coverage For All. According to John McCain’s health care plan, “John McCain understands that those without prior group coverage and those with pre-existing conditions have the most difficulty on the individual market, and we need to make sure they get the high-quality coverage they need.” [JohnMcCain.com, accessed 6/18/08]
· FACT: McCain Does Not Support Guaranteed Issue. Does Cornyn? Regarding health care, “guaranteed issue” is the forbidding of insurance companies from denying any person from coverage. “John McCain opposes guaranteed issue, [leading] to criticism that he doesn’t address the problem of the uninsurable.” [Washington Times, 6/16/08]
· FACT: Women Who Have Had Caesarean Sections Likely To Have Trouble Obtaining Insurance. Because a previous birth through Caesarean section is considered to be a prior condition by some insurance companies, women who have had to undergo the surgery are less likely to be accepted onto another plan. “Individual insurance differs sharply from the group coverage with which most people are familiar. Group policies generally require that the insurer cover everybody in the group, and charge the same rates for all. But with individual coverage, insurers in many states can vary their prices based on medical history, exclude certain services or reject anyone they consider a bad risk.” [NYTimes, 6/1/08, emphasis added]