McCain Calls For Health Care Tax Credits

John McCain unveiled a health care plan Tuesday that emphasizes tax credits to help Americans pay for insurance, wading into an issue that has at times dominated the debate among his Democratic rivals.

McCain is proposing a $2,500 credit for individuals and a $5,000 credit for families that decide to obtain health insurance directly from providers, instead of through their employers.

In a speech in Tampa, Fla., McCain stressed the importance of relying on free-market principles to reduce health costs. He said his plan would “help change the whole dynamic of the current system, putting individuals and families back in charge, and forcing companies to respond with better service at lower cost.”

He also knocked the proposals of Hillary Clinton and Barack Obama, which include mandates requiring Americans obtain coverage. Clinton’s plan requires that all Americans enter into coverage while Obama’s requires that children be insured.

The debate over how to provide insurance to the 47 million uninsured Americans has often taken center stage in the Democratic debate. Since revealing their plans last year, Clinton has criticized Obama’s plan for lacking a mandate that she believes would provide health care for all Americans, while Obama has countered that his plan would be more effective in lowering costs.

Unlike McCain’s, both Democrats’ plans call for new government programs that would provide insurance that Americans could choose instead of their employer-based plans. Both also call for the plans to be partially funded by government subsidies and the repeal of the President Bush’s tax cuts for those making more than $250,000 a year.

Health care ranks as the third or fourth issue most important to Americans in recent polls, behind the economy, the Iraq war and gas prices.

McCain plans to spend more of this week talking about his proposals, and his campaign is running a new ad in Iowa outlining them. Watch the ad here and read some of McCain’s health care speech in Tampa after the jump.

McCain’s speech:

Under current law, the federal government gives a tax benefit when employers provide health-insurance coverage to American workers and their families. This benefit doesn’t cover the total cost of the health plan, and in reality each worker and family absorbs the rest of the cost in lower wages and diminished benefits. But it provides essential support for insurance coverage. Many workers are perfectly content with this arrangement, and under my reform plan they would be able to keep that coverage. Their employer-provided health plans would be largely untouched and unchanged.

But for every American who wanted it, another option would be available: Every year, they would receive a tax credit directly, with the same cash value of the credits for employees in big companies, in a small business, or self-employed. You simply choose the insurance provider that suits you best. By mail or online, you would then inform the government of your selection. And the money to help pay for your health care would be sent straight to that insurance provider. The health plan you chose would be as good as any that an employer could choose for you. It would be yours and your family’s health-care plan, and yours to keep.

The value of that credit — 2,500 dollars for individuals, 5,000 dollars for families — would also be enhanced by the greater competition this reform would help create among insurance companies. Millions of Americans would be making their own health-care choices again. Insurance companies could no longer take your business for granted, offering narrow plans with escalating costs. It would help change the whole dynamic of the current system, putting individuals and families back in charge, and forcing companies to respond with better service at lower cost.