Are they going to withdraw from Florida?

Ok. Here is how this works (did work). The McCain healthcare plan would give a family a $5000 credit to pay for health insurance but make the money you and your employer pay towards premiums taxable. You'd pay regular taxes and payroll taxes on any benefit your employer provided for you. The reason this sucks is that it costs your employer more too because they are applying the payroll tax as well as just making the regular part taxable. That means your employer has to pay tax on the benefit it is giving you.

This plan would be revenue neutral but you'd also, likely as not, no longer have coverage from your employer and have to get it on your own. Generally it costs $9,000 to $13,000 for a family policy on the open market. That means that, at best, you are out $4,000 after you apply that credit. Hey, who knows, maybe that's less than you pay in now but, remember, that's also really a best case scenario.

This is why Barack Obama is characterizing McCain's plan as a "tax increase". Middle class, likely as not, will wind up paying more for their insurance under this plan. The McCain campaign was arguing that the plan was "revenue neutral" meaning it wouldn't be a net increase or decrease in taxes. Of course, that still doesn't make up for all the money between the credit amount and your actual premium.

Well, now the McCain campaign is saying two new things. One is good. The other, well, I am not sure what idiot came up with it but here goes:

• Payroll taxes will not apply. This is significant in two ways. First, it makes it less likely that employers will just dump covering their employees. So on that score, it is a win. But second, it makes the whole thing very revenue un-neutral, to the tune of $1.3 trillion dollars!
• The money for that $1.3 trillion will come from: Medicare and Medicaid.

Now, they would have you believe that they are going to get the money from making Medicare and Medicaid more efficient and cutting back on fraud. There are several problems with these hypotheses.

Medicare, although not Medicaid, is generally acknowledged to be the most efficiently run healthcare organization in the United States. By far! Most numbers show that Medicare returns nearly 98 cents of every dollar back in the form of benefits. The best private plans only spew back something in the low to mid 80's.

Second, both plans have had extensive anti-fraud effort applied to them in the recent past. Further efforts are unlikely to produce the numbers needed without impinging on legitimate claims being paid as well. Even then there is some argument on whether it would provide any tangible result.

Finally, Medicaid can only be controlled so far. Most of the administration of Medicaid is through the states. How efficient it is and how much fraud occurs is not as directly in control of the Federal Government as it is in Medicare.

So, if you are going to get the savings from Medicare and Medicaid, you will almost certainly have to make actual cuts to make it happen.

So, here we are, with the McCain campaign, struggling to hold on to even states it thought were locks, and they go and propose doing what will obviously be portrayed, and probably somewhat accurately, as cutting Medicare and Medicaid. I mean, how else can you read this?

I am becoming convinced that they are obviously throwing this election. That is the only conclusion I can come to. MSM already has a hold of this. Even if you backtrack and say "OH NO! We're not going to cut Medicare!", well, the damage will already have been done. The seed of distrust has already been planted.

You just lost a whole bunch of votes in Florida, John McCain! Good luck trying to get them back! Good luck trying to get the state back!

Comments welcome,

Pat McGovern

It's got electoral votes. It's what politicians crave.