McCain favors open-market approach to health insurance

TAMPA, Fla. — Sen. John McCain on Tuesday detailed his plan to solve the nation's health-care crisis, calling for the federal government to give some money to states to help them cover people with illnesses who have been denied health insurance.

McCain's plan would shift the emphasis from health insurance provided by employers to health insurance bought by individuals, to foster competition and drive down prices. To do so, he is calling for eliminating the tax breaks that encourage employers to provide health insurance for workers and replacing them with $5,000 tax credits for families to buy their own insurance.

His call for expanding coverage through market-based competition differs from the Democrats' proposals to move toward universal health-care coverage, with government subsidies to help lower-income people afford their premiums.

McCain had previously described aspects of his health-care plan. On Tuesday, he offered details on how to cover people with existing health problems, in a nod to the growing concerns about the difficulties that many sick, older and low-income people have in getting insurance. Democrats had said his market-driven plan, by not compelling insurance companies to cover people with health problems, would ignore the plight of people who have trouble getting coverage.

McCain is trying to develop a way to cover people with health problems while taking a generally market-based approach to solving the health-care crisis.

"I'll work tirelessly to address the problem," McCain said in a speech at the H. Lee Moffitt Cancer Center & Research Institute in Tampa. "But I won't create another entitlement program that Washington will let get out of control. I won't do it."

For people who get health insurance through their jobs, McCain's plan would provide a tax credit they could apply toward buying a different, and potentially less expensive, health-insurance plan tailored to their needs and allow them to keep the same health plan, and doctors, even if they switch or lose their jobs.

But Democrats and some experts said the proposal might lead some employers to stop offering health insurance and questioned if the tax credit would cover the cost of private insurance.

The plan calls for giving $2,500 tax credits to individuals and $5,000 credits to families to buy insurance. The average cost of an employer-

funded insurance plan is $12,106 for a family, according to the Kaiser Family Foundation, a health-policy group.

Unlike McCain, of Arizona, both Sens. Barack Obama of Illinois and Hillary Rodham Clinton of New York would make it illegal for health-insurance companies to deny an applicant because of health problems. They said such regulation is needed to end discrimination against those with pre-existing medical conditions.

Rather than force insurers to stop cherry-picking the healthiest — and least-expensive — patients, McCain proposed that the federal government work with states to cover those who cannot find insurance on the open market.

With federal financial assistance, his plan would encourage states to create high-risk pools that would contract with insurers to cover consumers rejected on the open market.

The total cost of McCain's plan and an estimate of how many people it would help were not addressed in the speech. There are more than 40 million people in the U.S. without health insurance.

Material from The Associated Press is included in this report.