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Senator John McCain (R-AZ) has proposed a radical health care plan that could disproportionately harm insured racial and ethnic minorities. The McCain plan would make health care less affordable for minorities, cause some minorities with employer-based insurance to lose their coverage, and make health insurance less accessible for minorities with chronic or pre-existing conditions. Racial and ethnic minorities, on average, have lower incomes, higher rates of uninsurance, and poorer health than white Americans; the McCain plan would further marginalize them in the health care system.
The McCain health care plan would replace employer-based coverage with private, individual coverage. The plan would repeal the tax exclusion for employer-sponsored health insurance. As a substitute, individuals and families would receive a refundable tax credit—$2,500 for individuals and $5,000 for families—that could be used to purchase coverage in the employer or individual markets. The credit would not vary by health status, income, or family size. Individuals who are chronically ill or have pre-existing conditions would have fewer consumer protections and may not be able to afford or find coverage in the individual market.
By making health insurance less affordable and less accessible, the McCain health care plan would disproportionately affect racial and ethnic minority health for the worse. African-American and Hispanic family median income is roughly $40,000, which is 42 percent less than that of white families, putting health insurance even further out of their financial reach.1 And by shifting from employer coverage to the individual market, the McCain plan would put more than 12 million chronically ill, non-elderly minority adults at risk of losing coverage in a market with fewer protections, higher costs, and less coverage.
Specifically, the McCain health care plan would have the following consequences:
The McCain plan would repeal the tax exclusion for employer contribu- tions to health benefits, placing 43.3 million minorities in jeopardy of losing employer-based coverage. More than 43 million racial and ethnic minorities have health coverage through the employer-based coverage system. The McCain plan would repeal the tax exclusion for employer contributions to health benefits and replace it with a refundable tax credit, likely causing many employers to stop offering coverage. It would cause people to turn to the individual market, which comes with high cost-sharing and often limited benefits. Those with pre-existing conditions may not find coverage.
The McCain plan would place 12.2 million chronically ill, non-elderly, minority adults at risk of losing coverage. There are 24.4 million chronically ill, non-elderly, minority adults in the United States, and about half, or 12.2 million, currently have employer-based health insurance. The McCain health care plan would cause many to lose their employer-based coverage, but because of their chronic illness, it is unlikely that these individuals will be able to find affordable health insurance in the individual market—if they can find insurance that will cover them at all.
The McCain plan would disproportionately make health coverage even more unaffordable for many minority families. Even after the $5,000 tax credit, the average health insurance premium would comprise more than 21 percent of a black or Hispanic family’s income, compared to about 12 percent of a white family’s income. Black and Hispanic families in poverty would likely spend more than 40 percent of their gross income on a health insurance premium.
The McCain plan would weaken consumer protections, leaving many minorities in danger of being uninsured. Most of the 10 states and the District of Columbia with the highest black and Hispanic populations—Arizona, California, Georgia, Louisiana, Maryland, Mississippi, Nevada, New Mexico, South Carolina, and Texas—have weak consumer protections in the individual market. Insurers in these states can, for example, discriminate based on health status or pre-existing conditions and only insure those who are deemed “healthy.” As such, the McCain plan would put blacks and Hispanics with pre-existing and chronic conditions at risk of not being able to find affordable coverage—if they can find coverage at all.
The McCain health care plan is a step in the wrong direction in reforming the American health care system for all, and it worsens racial and ethnic health dispar- ities, leaving many minorities behind. In 2006 blacks and Hispanics were nearly 1.7 and 2.8 times, respectively, more likely to be uninsured than non-elderly whites. These are statistics that we cannot afford to exacerbate, yet the McCain health care plan misses an opportunity to address this disparity in health coverage.
McCain’s plan also fails to address inequities in the quality of care delivered to minority Americans, and the poorer health outcomes suffered by these populations. His plan does not, for example, include any policies to reduce racial and ethnic health disparities such as increased cultural competency training for health care providers or investments in community healthy-living interventions.
This paper is an analysis of the McCain health care plan and what happens to insured racial and ethnic minorities. It begins with a brief summary of current racial and ethnic health disparities and key components of the McCain health care plan. It will then discuss how the McCain policies would put minorities in jeopardy of losing employer-based coverage and how insufficient his proposed tax credits would be for minority families to purchase health coverage. The paper will close with an analysis of the plan’s effect on chronically ill minority adults.
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