Tax Credit for Health Insurance? I Don’t Get It.

Someone please explain…

I don’t get how a tax credit for health insurance is supposed to help people who can’t afford health insurance to begin with.  If you can’t afford something, how does getting a rebate for that thing sometime in the first half of the next year going to make it easier to afford now?

In the past five years, before I had health insurance through my employer, I managed to pay out of my own pocket for really necessary things like eye exams and dental appointments and physicals because I made too much working two jobs to qualify for government programs.  In the seasons and semesters I wasn’t making as much, the yearly average of my fluctuating income kept me from qualifying as well.

The forms for these programs ask applicants to indicate their income as if it’s a constant, and for many working people it’s not–especially in a world of outsourcing and limited-contract employment.  In that situation, the overall income might look reasonable, but the reality is that the good months are always about catching up from the bad ones.

I keep hearing McCain talk about how it’d be so great for everyone to have this $5000 tax credit to “spend” on health insurance as if it’s some sort of cashable check he’ll put in your hand.  This tax credit is something you benefit from only if you have the money to spend in the first place.  And you actually have to have paid $5000 in taxes (and have already purchased health insurance valued at at least that much) to get the full benefit of that tax credit.

How does the promise of being paid back for something working families can’t afford to buy in the first place help working families?  And don’t forget that if single-payer health insurance works like other kinds of insurance, the companies will charge policyholders more money the more payments they have to split the premium into–more money out of pocket for those who can’t afford to pay the whole premium at once.

To me, McCain’s plan looks like giving a discount to people who can already afford health insurance, and continuing to ignore the plight of those who can’t.


One response to this post.

  1. Posted by redhatterb on October 15, 2008 at 10:02 pm

    I have wondered about those tax rebates myself. I don’t have to worry about insurance anymore, as I am 68 and on medicare and because I am low enough income I also get medicaid. However before I got on medicare, I couldn’t get medicaid because I had no minor kids, and had to go to one of the community clinics that McCain said we need more of. That might be but where I am at there is one clinic where rates are based on income and one that is completely free. I went to the free one. The free one if you have a really bad cold you have to wait at least one week to get in, and by then the cold will either be better or you will be dead. I have heard it is the same at the pro-rated clinic. The free clinic used rotating 3rd year residents with a supervising physician. I don’t know what the other one used.

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