This editorial breaks down McCain's plan:
"It is already apparent that health care will be a major issue in the 2008 presidential election, and John McCain joined the fight with his April speech. While he praised Health Savings Accounts, called for medical tort reform, and promised to promote preventative medicine, the heart of his address consisted of a proposal to begin shifting from employer-based health insurance to individual-based health insurance that subscribers could take with them from job to job.
As McCain pointed out, such a system would have many advantages. Individuals and families could shop for policies that fit them best, promoting greater competition and innovation among insurance companies. Because rates would presumably, as with life insurance, be determined on an individual basis, individuals would have greater incentives to protect their own health and be more careful about the use of services. There would be a tighter connection between individual decisions and the cost to the individual. It is precisely that lack of connection that promotes spiraling health care costs today. And no one would lose insurance just because he or she lost a job.
In McCain’s plan, Americans could choose to go this route, receiving a direct $2,500 tax credit for individuals or $5,000 for families to use purchasing their own health insurance, or they could remain in their employer-based program.
In economic terms, McCain’s plan would try to solve the nation’s health care problems by harnessing the free market rather than working against it."