Wednesday, October 29, 2008
Graph of the day: Benefits versus paycheck
In an interview with CNN Money, Doug Holtz-Eakin said many younger workers wouldn't have an incentive to dump job-based health insurance even if they received a $5,000 tax credit for personal insurance under the McCain plan. "Why would they leave?" Mr. Holtz-Eakin said. "What they are getting from their employer is way better than what they could get with the credit."From today's WSJ Political Diary. Those who are working are ending up with benefit packages that are more in real terms, and buy better health care.
Mr. Obama called this "an October surprise" that "health care" will be worse "if John McCain becomes president."
For the record, Mr. Holtz-Eakin noted via email that he was making an obvious point, that people won't drop their current coverage if it works well. Employers will still need to design compensation packages to attract employees, many of which will continue to include health care. The McCain plan merely creates new options, especially for those who are uninsured now.
In any case, Mr. Obama's attack is only intelligible if you believe health insurance is "free" when obtained through a business. Of course, it's far from free -- employees pay for their health care in the form of reduced cash wages. Indeed, when economists complain about "stagnant wages" for the middle class, they are really complaining that the increasing cost of health insurance has steadily eaten up what would otherwise be visible increases in worker pay.
Labels: economics, health care