The United Steelworkers began alerting every single one of its members on Sept. 11 that enactment of John McCain’s health care plan would result in the actual loss of $2,400 to $3,300 in annual income by every working member of the union.

“This alone should create a grounswell of unshakeable support and activism for Obama and against McCain in this election. If McCain is elected you are screwed,” a union statement to its members said.

The union objects to the McCain plan because it would tax employer-sponsored health insurance as income, while creating new tax credits — $5,000 for a family and $2,500 for an individual – for people who buy their own insurance. The Steelworkers call it a “lose-lose” plan for American workers and their families.

“This means that workers would have to pay taxes on the value of health benefits they received from their employers. This is explicitly an attempt to kill the existing system of employer-provided care by dramatically increasing taxes on workers,” declared Leo Gerard, the Steelworkers’ president.

The Kaiser Family Foundation recently completed a breakdown of how the McCain plan would impact the typical worker:

“In 2007, for a family the average total premium for a health care plan was $12,106, with $8,824 paid by the employer. Let’s say the McCain plan is enacted. What would happen to that average family if the employer continued to provide coverage (Scenario 1)? For a married couple filing jointly with income $63K-138K, the marginal tax rate is 25 percent. So they would face a tax increase of $2,406 (25 percent of $8,824.)

“But of course the intent of the McCain plan is to kill the employer-provided system. So let’s say the McCain program is adopted and your employer drops your family’s coverage (Scenario 2). What would happen? You would now have to foot the complete $12,106 bill for coverage, an $8,825 increase over the employee-portion you’re currently paying. This would be offset by a $5,000 tax credit. So net, you would end up paying $3,325 ($8,825 minus $5,000) more for your health care.”

“So, remarkably,” the union statement says, “McCain has managed to design a heads-you-lose, tails-you-lose program. Either your employer keeps your coverage, in which case you face a huge tax increase. Or your employer drops your coverage, and you face an even more massive increase in your out-of-pocket health care costs.

McCain has claimed that employers who drop health coverage would then increase wages, compensating workers for the jump they would have to pay in health care costs. “In the long run, there’s a fair case to be made that this would happen,” McCain has said.
The union alert noted that the famous economist John Maynard Keynes “famously remarked, ‘In the long run, we’re all dead.”

Another other major problem with the McCain plan is that on the individual market, people with pre-existing conditions are denied coverage.

“I’ll work tirelessly to address this problem,” McCain said in a speech two days before the union issued its alert. “But I won’t create another entitlement program that Washington will let get out of control. I won’t do it.” However he offered no specific proposals that would address the problem.

Summarizing the McCain plan’s problems, the Steelworkers said, “It would raise taxes on workers in an effort to eviscerate the current health care system in the name of free market idolatry. To the extent it fails to completely destroy the existing system it would saddle the average family with $2,400 in extra taxes to penalize them for having employer-sponsored care. And if the McCain plan succeeded in killing the current system, it would leave tens of millions unable to buy any care.”

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