Regarding John McCain's plan to provide a tax credit for insurance, is it true that he would tax health-care benefits and it could cause people to be pushed out of health-care coverage? -- Jeannette Betancourt-Fontanet, Hilliard, medical technologist

In the flurry of ads, claims and counter-claims leading up to the Nov. 4 presidential election, a fixture of Democrat Barack Obama's charges against his Republican rival has been this: "John McCain wants to tax your health-care benefits!"

But is it true?

The answer: yes. McCain's health-care proposal, for the first time, would tax the value of health-care benefits provided by your employer. There's a wealth of information on his Web site ( www.JohnMcCain.com) about health care, but almost nothing about his proposed new tax on benefits.

However, the silver lining in McCain's proposal is that he wants to give all adults a $2,500 tax credit and families a $5,000 tax credit. The credit, in the vast majority of cases, would erase the added cost of the new tax on employer-paid benefits, experts say.

About 70 percent of Americans obtain health-care coverage through their employer. Those benefits are now excluded from income for tax purposes. The Congressional Joint Committee on Taxation calculates that the exclusion costs the federal government $212 billion annually in revenue.

So if McCain is elected, will the tax part of his health-care plan hit Ohioans in the wallet?

Again, the answer is "yes," but only for a few.

Individuals and families in the lower tax brackets would not see their taxes increase and probably would have money left over. Likewise for those in the middle tax brackets.

However, those in the higher tax brackets and those who have what McCain described in Wednesday's debate as "gold-plated" policies with greatly expanded or specialty coverage would pay more in taxes, the McCain campaign acknowledges.

People who buy their own insurance would benefit the most because they have no employer benefits to be taxed and will receive the tax credit like everyone else.

An example cited recently by U.S. Sen. Chuck Grassley, an Iowa Republican and expert on taxes:

A family in the 25 percent tax bracket who receives $12,000 annually in employer-paid health-care benefits would pay $3,000 under McCain's new tax plan. However, the family would get a $5,000 credit, leaving them with a $2,000 tax cut.

The same family in the 10 percent tax bracket would pay $1,200 in new taxes, Grassley said, but the McCain tax credit would leave them with a $3,800 tax cut.

Now the downside: Several analyses of the McCain plan, including one done recently by the University of Michigan, indicate that many employers would stop providing employees with health care once the favorable tax treatment is dropped. Estimates show that could push 20 million people out of health-care coverage.

The McCain campaign disputes these estimates, arguing that competition in the marketplace would make prices more competitive and allow more people to access health insurance who couldn't afford it without the tax credit. They say that 25 million to 30 million people could be added to the rolls of the insured.

The Kaiser Family Foundation estimated that the average annual cost of a single-family plan last year was $4,500 to $5,100 for individuals and $9,200 to $12,106 for families.

"John McCain is putting the American family in charge," said Douglas Holtz-Eakin, the Republican's chief policy adviser. "Families -- not government bureaucrats or insurance companies -- will make the decisions that best reflect their family needs.

"It's about competition in the marketplace," he said. "Let's have them compete on the right grounds -- quality of care."

Some experts say an unwelcome result of McCain's proposal would be that younger, healthier people would abandon employer-paid health care to go out on their own. That would leave older workers, and those with pre-existing conditions, in health-care pools, most likely increasing the cost of coverage.

ajohnson@dispatch.com