For Sen. John McCain (R-Ariz.), having health insurance is desirable but not mandatory.

“I don't think there should be a mandate for every American to have health insurance,” the Republican presidential hopeful said at a forum on health care policy sponsored by Families USA and the Federation of American Hospitals. “One of our goals should be that every American own their own home, but I'm not going to mandate that. … I feel the same way about health care. If it's affordable and available, then it seems to me it's a matter of choice amongst Americans.”

As Sen. McCain sees it, health insurance is something many people decide they don't want. “The 47 million Americans that are without health insurance today, a very large portion of them are healthy young Americans who simply choose not to” sign up for it, he said at the forum, which was underwritten by the California Endowment and the Ewing Marion Kauffman Foundation. He added, however, that some people with chronic illnesses and other preexisting conditions do have problems accessing insurance, “and we have to make special provisions for them, including additional trust funds for Medicaid payments [for people] who need this kind of coverage.”

Instead of mandating that people have health insurance, Sen. McCain, who is serving his fourth term in Congress, said his priority as president would be to rein in health care costs. “If we can bring down costs, as I believe we can … I'm absolutely convinced more and more people will take advantage of [health insurance].”

One way to control costs at the federal level is to not pay for medical errors involving Medicare patients, Sen. McCain said in an interview after the forum. “Right now we pay for every single procedure–the MRI, the CT scan, the transfusion, whatever it is. [Instead], we should be paying the provider and the doctor a certain set amount of money directly related to overall care and results. That way we remove the incentives now in place for overmedicating, overtaxing, and overindulging in unnecessary procedures. I also think it rewards good performance by the providers.”

To expand access to health insurance, Sen. McCain is proposing a refundable tax credit of $2,500 per individual and $5,000 per family to help the uninsured buy health insurance policies. To pay for the tax credits–which would cost the government an estimated $3.5 trillion over 10 years–he proposes abolishing the tax deduction that employees currently take when they pay premiums on their employer-sponsored health plans. He would, however, leave intact the deduction that employers currently take on their portion of the premiums as an incentive for employers to continue offering coverage.

When it's the employee's money and their decision, “I think they make much wiser decisions than when it's provided by somebody else.” And because the tax credit is refundable, low-income Americans who currently pay no taxes will receive a check for the amount of the credit, he noted.

When a reporter pointed out that the average cost of a family health insurance policy is more than $12,000 per year–far higher than the amount of the proposed family tax credit–Sen. McCain said the credit still would be beneficial. “One thing it does is if someone has a gold-plated health insurance policy, they'll start to pay taxes [on those premiums] and it may make them make different decisions about the extent and coverage of their health insurance plan,” he said. “Another thing it does that I think is very important is that for low-income people who have no health insurance today, at least now they've got $2,500, or $5,000 in the case of a family, to go out and at least start beginning to have [it].”

Sen. McCain admitted that the tax credit plan “is not a perfect solution, and if not for the price tag involved, I'd make it even higher. But according to the Congressional Budget Office, by shifting the employee tax aspect of it, you save $3.5 trillion over a 10-year period, and I think that would have some beneficial effect at reducing the overall health care cost burden that we're laying on future generations.” The senator said he did not have an estimate of how many uninsured people would be able to buy health insurance coverage because of the tax credit.

Sen. McCain said he does not support outlawing the “cherry-picking” that some health plans do to make certain they insure mostly healthy people. Outlawing cherry-picking “would be mandating what the free enterprise system does and that would be obviously something that I would not approve of.” Instead, he favored broadening the high-risk pools that states use to provide coverage for some of their uninsured residents. “I would rather go that route than mandate that health insurance companies under any condition would have to accept a certain level of patients. … One reason is that we have seen in the past that [insurance companies] have a great ability to game the system.”

Sen. McCain also said he hoped the tax credit plan would encourage more people to open health savings accounts (HSAs).

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Every American should own their own home, 'but I'm not going to mandate that. … I feel the same way about health care.' SEN. MCCAIN

McCain Favors Credits, Cost Cutting to Bolster Coverage