October 5th, 2008
07:56 PM ET
14 years ago

Fact Check: McCain's proposed health care tax credit

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2008/images/10/05/art.bobldg1005.ap.jpg caption="Sen. Obama spoke about health care Saturday in Newport News, Virginia."]
The Statement: At a campaign stop Saturday, Oct. 4, in Newport News, Virginia, Sen. Barack Obama discussed Sen. John McCain's health care plan. He argued that many people would lose their employer-provided health insurance, and would be left trying to buy health insurance plans for their families with the $5,000 tax credit the McCain plan offers. Obama said, "What Senator McCain doesn't tell you is that the average cost of a family health care plan these days is more than twice that much - $12,680. So where would that leave you? Broke."

Watch: 'That ain't right,' Obama says

Get the facts!

The Facts: The figure Obama provided, $12,680, comes from a study published last month in the journal Health Affairs. That study found that "average annual premiums in 2008 are $4,704 for single coverage and $12,680 for family coverage."

That same study also reported the average cost workers pay for employer-provided health care coverage is $721 for singles and $3,354 for family coverage. The rest is covered by the employer. Those figures back up a conclusion from the nonpartisan Tax Policy Center - that McCain's health plan, offering a tax credit of $2,500 per individual and $5,000 per family, initially would be a net tax cut for many. As the CNN Truth Squad has previously reported, the center calls McCain's health care plan a tax cut for virtually all Americans through 2013 and for the middle-class through 2018, which is as far as the center has projected. But the center says long-term, some of those benefits might erode if the tax credit did not keep up with costs of health care.

Obama, at his campaign stop, cited studies that suggest millions of Americans may lose their employer-provided health insurance under McCain's health plan. A study published in Health Affairs in September did estimate that 20 million people may lose employer-based coverage and take on other insurance coverage, and that plans would likely be "less generous." However, McCain says his plan would give people more options, increase competition, and lower costs.

It's impossible to say definitively whether millions of people would lose their health insurance under McCain's plan. And, how much it takes to leave someone "broke" depends on the family.

The Verdict: True. In the narrow set of circumstances Obama lays out, workers who lose employer-sponsored health insurance would need to spend "more than twice" the amount of McCain's tax credit in order to maintain the same plan they have today.

Editors Note: This story, and the verdict, were updated after a closer review of the context of Obama's remarks.

Filed under: Candidate Barack Obama • Fact Check • Health care • John McCain
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