Senator John McCain has a plan for healthcare that is out of touch with reality because it totally ignores the cost of healthcare, and it does not take into consideration cost of living differences.

McCain’s plan is to offer a $5000 refundable tax credit (what a rebate?) to families to help pay for healthcare. That sounds pretty good until you hear he is including the elimination of the exemption of employer-provided healthcare from income taxes.

Most plans that cover a family cost well in excess of $1000 a month in the US, and sometimes much more in areas that have a higher cost of living. So, if on average, one pays $15000 for healthcare a year and gets a $5000 credit, it would only be marginally different from getting the tax deduction in the first place. Anyone that pays more due to the cost of living would actually pay more taxes because their medical benefit would be taxed as income! This is inherently unfair and could push people towards the Obama camp, especially those in areas with a higher cost of living.

Even some groups that favor better health coverage for their union members are backing away from McCain. The United Mine Workers of America, for example, have endorsed the Democratic ticket specifically for this reason. “Mr. McCain’s plan would impose a tax on health care benefits that have been negotiated into employees’ contracts” said Cecil Roberts, union president.

A more fair plan, if McCain wishes to support commercial health care, is to require an increase in the taxes on profits from those companies providing healthcare. While many people believe that healthcare cost increases have hurt Americans, few have any idea how much they have benefited the US Healthcare Insurance companies such as Unitedhealth Group, Inc. the largest insurer in the US. Unitedhealth Group’s sales have steadily increased while their cost of revenue has dropped. It is good to know someone is benefiting from the high cost of health care, but not if our individual costs for that health care are to be taxed!