This is the Cato Daily Podcast for Monday, May 5th, 2008.

I'm Caleb Brown.

Senator John McCain is out with his plan to reform U.S. health care.

Cato Institute's senior fellow Mike Tanner says, minor quibbles aside,

it's a large step in the right direction.

Well it's certainly possible to quibble with some of the details in the McCain plan and there are some aspects that I think are not as free market as we would like to see them.

But in terms of the big concepts, John McCain has it right here.

First of all, unlike Hillary Clinton or even to a lesser degree,

Barack Obama, Senator McCain has understood that the goal of health care reform is not just

universal coverage, it's not just getting a piece of paper in everybody's hands saying

they have health insurance. Rather it is to make health care more affordable

and to improve health care quality. So he is much more focused on reducing the

cost of health care, getting consumers more involved, improving the quality of health care.

That's really what the health care reform debate should be about.

Now he has in his plan and I don't know if this is a quibbling detail,

a refundable tax credit for individuals of $2,500 and a $5,000 tax credit for families

for insurance they get no matter where they get it.

While a refundable credit would go to people who even who don't pay taxes necessarily.

It's a subsidy, a form of welfare.

But the key concept here is that John McCain wants to move us away from our current employment-based health

insurance system.

Essentially what he would do is say that if you currently make $50,000 a year and you get a $10,000 insurance policy from your employer,

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