Doing the math on pocketbook issues?

Is it just me or does it seem that the mainstream media thinks that ANY discussion of issues, particularly pocketbook issues, are just too boring to be of interest to voters?  Whatever the reason, the failure of candidates and the media to get “down in the weeds” on pocketbook issues discriminates against working-class voters, for whom some of the policies proposed could be matters of survival.

The candidates’ web sites have a substantial amount of detail on some policies, but not

others.  On taxes, for example, both candidates are specific enough for the Tax Policy Center to do a detailed analysis of who would benefit and by how much from each policy.  The majority of families earn less than $66,355, for example, and they will get a maximum tax cut of $319 a year from McCain and a maximum of $1,042 from Obama.  The small group of families making more than $226,000 but less than $603,000 will get a $12 increase in their tax bill from Obama and a $7,871 cut from McCain.  For a handy chart, click here.

On health insurance, however, Obama’s policy papers are maddeningly vague.  Except for Dennis Kucinich, all the Democratic primary candidates rejected a single-payer Medicare-for-all approach in favor of a plan first articulated by Yale political scientist Jacob Hacker for the labor-backed Economic Policy Institute.  That plan provides a “Medicare-like” option that would compete in the market with private plans while requiring all employers to either provide a government-standard plan for their employees or pay a 6 percent payroll tax to fund the Medicare-like option.  Whatever option employers or individuals choose, however, no household would pay more than $2,400 a year in health insurance premiums, and everybody with income of less than 300% of poverty (about $63,000 for a family of four, for example) would pay less than that, with anybody below 200% of poverty ($42,000 for a family of four) paying nothing at all.

Even at the $2,400 level, Hacker’s plan would save the typical worker covered by a company plan about $600, according to the National Coalition on Health Care’s estimates of current costs.   Because Medicare’s administrative costs are at least four times less than private plans, “Medicare-like” would have a substantial advantage in a truly free market.  Though it might take a decade or two, eventually the vast majority of people would likely leave employer-based coverage and choose the Medicare-like option.

Obama’s plan is based on Hacker’s, but without any of the details.  Both plans would provide an immediate form of universal coverage while making it impossible for private health insurance companies to make their profits by denying coverage to people who are likely to get sick.  The lack of specific commitments on caps and subsidies in Obama’s plan is troubling, but it has a lot to offer workers and working-class families, both those not currently covered at all and many more who are underinsured, insecurely insured, or expensively insured.  For a one-page list of these, based on the Hacker plan, click here.

The McCain plan does not even try to cover everyone and, as best I can tell, would eventually leave most workers with less coverage at a higher price.  McCain would eliminate the federal tax deduction for companies who provide health insurance for their workers, likely leading more employers to eliminate coverage.  That would be okay, according to McCain, because his plan would provide a tax subsidy of $2,500 for individuals and $5,000 for families to buy their own plans.  Corporate plans typically cost about $12,000 for family coverage, with the employee paying about $3,000 and the employer paying the rest.  So, after applying McCain’s tax subsidy, the average worker would have to pay about $4,000 more for family coverage than s/he is paying today. This would mean that a worker making a median wage could end up spending a quarter of her take-home pay on nothing but health insurance. The author of “Why McCain has the best health-care plan” says that won’t happen because employers will share with their employees all of the money they save by eliminating coverage.

This is just back-of-the-envelope arithmetic by a humanities professor who forgot any algebra he ever learned.  But, geez, it seems like a lot is at stake.  Shouldn’t we be discussing this instead of McCain’s computer skills and Obama’s lapel pins?

Jack Metzgar

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