Two (More) Reasons Why McCain is Out-of-Touch

This time around, it is the economy, stupid, and it’s health care. John McCain has lately jumped on the Pander Express (say whatever the audience wants to hear) on the issues of health insurance and capital gains. Once again, his pronouncements show how clearly out of step his is with the real concerns of the majority of Americans.

Now, we know that John McCain has lived with the “government healthcare” for nearly all his adult life:  his dad was a Navy man; John himself was in the military and has been covered under the healthcare plan that all members of Congress receive. (Actually, I suppose his time at the “Hanoi Hilton” featured “government healthcare” also, but that’s not what anyone, regardless of political philosphy, would want to espouse).

McCain apposes Universal Health Care for everyone, favoring “tax credits” to help individuals buy health insurance. He’s actually pushing to switch the vast majority of people on employer-sponsored group plans toward individual plans provided by for-profit insurers. This is yet another one of those times where McCain’s complete lack of knowledge of economics comes to the fore. Part of the idea of insurance — any kind of insurance — is to spread the risk of a small number of claims over a large pool of insured. The larger the pool, the less any one incident will impact the financial viability of the group providing the insurance. With Universal Health Care, by covering everyone (including those who are generally very healthy and who typically resist having insurance), you lower the overall costs. To be fair, this is where Barack Obama’s plan falls down as well. Failing to require everyone to be covered is a bit like having auto insurance only for those who actually have accidents.

McCain’s often repeated phrase is that he trusts the American people to make decisions on their health care. Really? Where has he been? Ask all those people who have health insurance. Last year, I had surgery on my hand. I chose a surgeon based on his experience. He turned out to be out-of-network, which my insurance company permitted (not all do). The only difference was that I had to pay, out of pocket, about $5,000 to use that doctor. Add to that co-payments on necessary post-operative physical therapy, drugs, etc. and my total cost came to nearly $10,000. That’s with a really good, group plan.

The current reality is that the insurance companies, not the average person, is aleady calling the shots. Need a drug that is not covered, or is a “tier 3″ or tier 4” drug with a huge co-pay? Well, unless you can afford it, you aren’t getting it. Want to best cancer care for your kid? Sorry, your plan doesn’t cover Memorial Sloan-Kettering; you’ll have to use one of our “approved” hospitals (and make sure you get pre-approval before you rush your kid off, or you’ll get stuck with the whole $250,000 bill yourself).

McCain says he doesn’t want “government making your health care decisions.” Well, personally, I’ll take the government “of the people, by the people, for the people” over the private, profit-above-all-else insurance companies.

Big Mac’s other latest big blooper relates to the debate over possibliy raising the tax rate on capital gains (currently 15%; previously as high as 28% in recent years). Now, having made a large capital gain on the sale of a condo when I moved, I can’t say I was unhappy to play the lower rate on the money I made. (It was still a huge check that I wrote to the IRS, but hey, I made a huge pile of money).

McCain has been lately saying that this would be a “tax increase for those millions of Americans who have money in 401(k) plans.” Now, McCain is married to a very wealthy woman, so perhaps he can be forgiven for not knowing how 401(k) plans work. You put money in (on which you pay no income taxes or payroll taxes) and all the money you make accrues tax-free. There are no capital gains on 401(k) plans until you start to liquidate them (generally when you’re retired). At that point, your overall tax rate is probably very low.

I’d like to say that John McCain has a lot of good ideas, but I’m hard-pressed to think of anything in recent years. I’m sure I could probably come up with some — he is, after all, someone who has worked with Republicans and Democrats to come up with some decent legislation. But boy, he’s sure seeming to be out of touch these days. Hard to believe that this man is actually running neck-and-neck in the national polls at this point.

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