Funding Private Healthcare

McCain's recently unveiled National Health Care Plan (Federal Money in Health Care Plan From McCain, NYTimes 4/30/08) recommends providing a tax credit of $2,500 per individual and $5,000 per family so that all Americans can afford to purchase health insurance.  Funding for this plan would come by eliminating tax breaks currently given to employers for providing health insurance to their employees. 

Naturally, the plus side of McCain's plan is it achieves more portability: health insurance consumers would no longer fear leaving their employer because of the possibility of losing benefits.  That's good for individuals and for encouraging entrepreneurship.  Still, the plan leaves one issue unclear: how will states afford to pay for the influx in citizens that cannot get insurance because of pre-existing conditions.  When asked, McCain suggests that the federal government should increase state funding for high-risk insurance pools.  When pressed to recommend how such a federal-state funding structure should work, the Magic 8 Ball said "reply hazy, try again."