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Health Care Tax Plan Analysis: 91,000+ in ID Would Lose Coverage

October 9, 2008

Boise, ID – Among the healthcare reform ideas being batted around on the campaign trail is a new tax on employer-sponsored health insurance coverage, along with deregulation of the insurance industry. Its supporters believe with such a plan, the market would lower prices for everyone by increasing competition among insurers.

However, a new report released by the advocacy group Idaho Health Care for America Now indicates it could result in more than 91,000 Idahoans losing the health insurance coverage they get on the job.

The proposal, supported by presidential candidate John McCain, would tax health insurance premiums on coverage offered by businesses to their employees. The Idaho group, which is part of a national grassroots campaign to advocate for comprehensive healthcare coverage, says the additional expense would prompt businesses to drop coverage in order to save money. Its spokesperson, Pamela Baldwin, says that would throw many people with pre-existing conditions into the open market to try to find affordable coverage from private companies.

"Sixty-two percent of people with chronic illnesses - and that's asthma, arthritis, diabetes, cancer, heart problems - are covered by employers."

Baldwin says there are health insurance companies that won't insure people with those conditions at any price. McCain proposes a "high-risk pool" for these cases; Baldwin believes it would still exclude some conditions. Further, she says, there are other proposals that guarantee quality coverage for everyone at prices families could afford, and lists three options in the plan supported by her organization.

"Keeping their own insurance; choosing national insurance; or choosing a plan that is actually a national healthcare plan for all."

Critics of that idea say a national system of health coverage would push private insurers out of business, and quality would suffer.

Deborah Smith/Don Mathisen, Public News Service - ID