Health Insurance Bait And Switch

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Photo by Laurie Hicks

ONE UNDERREPORTED STORY of this election is how heavily John McCain has been damaged by Barack Obama's television ad assault on his health-care insurance plan. A lot of voters seem to believe the Democrat when he says that Mr. McCain wants to deny them coverage or bankrupt them with crushing hospital bills.

Mr. McCain has himself to blame for not defending his own reform ideas, during the debates and in TV ads, against attacks that have been misleading when not flat-out false. Even so, Mr. Obama's tactics are especially cynical because his own health-care advisers support plans much like Mr. McCain's. Or at least they did before joining up with Mr. Obama.

Put simply, the McCain plan seeks to remedy a distortion in the health-care market that economists have spent decades begging politicians to fix: The tax code subsidizes insurance only if it is provided through employers. Individuals can't take the same tax deduction for buying insurance that businesses can. So Mr. McCain wants to "spread the wealth" of these tax breaks to individuals of any income through a refundable tax credit, no matter where they get coverage.

"The fact that the tax subsidy, which supports the employer-sponsored system, is better than nothing is a feeble excuse for resisting any changes to the status quo." That's not John McCain's judgment. It's a quote from Jason Furman, who happens to be Mr. Obama's economic policy director. In a cri de coeur published in the journal Democracy in 2006, Mr. Furman implored fellow Democrats and other progressives to confront "a critical missing link" in their health ideology—the same link his boss now spends most of his time demagoguing.

Read the entire Wall Street Journal report.

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