Facebook Twitter Tumblr Close Skip to main content
A Project of The Annenberg Public Policy Center

More Health Care Exaggerations

Planned Parenthood is distributing a mailer in Ohio that criticizes Sen. John McCain’s health care plan. But it uses a bogus figure on what McCain’s plan would do to Ohioans’ taxes.

The mailer says, “I see struggling patients every day. That’s why I was so horrified when I read about John McCain’s proposed health care tax. Maybe he can afford a $2,800 tax, but his plan will really hurt a lot of people.”

Under McCain’s plan, workers with employer-provided health benefits would pay income taxes on the value of such benefits. McCain would also give individuals a tax credit of up to $2,500 (or $5,000 for couples or families) to be used to pay those taxes, or purchase health insurance on the open market.

We looked at a United Auto Workers TV ad that also used the same $2,800 tax figure, and there are several things wrong with it. The number comes from a study by the liberal Center for American Progress Action Fund, which says that a couple earning $40,000 to $60,000 a year would pay that amount, even with the tax credit, in 2018. However, the study includes both income and payroll taxes, as well as state income taxes, on the value of health care policies. McCain says his plan would only levy income taxes on the value of health benefits. It’s not known whether state taxes would go up — states could enact their own tax credit or deduction for health insurance.

When we got rid of the payroll taxes, we calculated that such a family would get more than enough money from the tax credit to cover their tax bills, even if they had to pay a typical state income tax of 5 percent — and even in 2018, when the value of their insurance would have increased substantially.

The Planned Parenthood mailer uses other statistics from the study to warn against McCain’s plan:

It says McCain’s plan would “potentially eliminate health care benefits for 6.6 million Ohio workers.” That’s the total number of Ohioans who get health insurance through their jobs. While it’s true that independent experts say McCain’s plan would lead to a net loss in the number of people with employer-provided benefits, it’s a bit of a stretch to suggest that all workers in Ohio would lose their health care. For instance, a study by the Lewin Group estimates that in 2010, 16.1 million workers would lose their job-provided benefits under McCain’s plan, but many would pick up coverage from another source. In the end, 4.3 million would be uninsured. (Obama’s plan would result in a net gain in the number of those with employer-sponsored plans, according to the study, but would leave 1.5 million who used to have employer-provided plans uninsured.)

The mailer also says McCain would “make it harder for 2.3 million Ohioans with conditions like asthma and diabetes to get insurance.” Independent experts do say that those with preexisting conditions could have a tougher time getting coverage on the open market due to McCain’s plan to allow the sale of insurance across state lines. That would enable companies to set up shop in states with less regulations on coverage requirements. Whether all 2.3 million in Ohio with such conditions would have a harder time getting coverage is an open question. McCain proposes expanding high-risk pools to help cover those with high-cost care. It’s worth noting that that’s a pricey proposal: Such pools already exist in some states but cover only 200,000 people at high premium rates and high costs to the states.

For more on the candidates’ health care plans and how each spins the other’s, see our article “Health Care Spin.”