Sen. John McCain promoted health insurance tax credits and Sen. Barack Obama promoted opening a federal employees-style health plan for all Tuesday during the second presidential debate.

McCain, R-Ariz., said he would work to create a $5,000 refundable tax credit that Americans could use to buy their own health coverage, and that he would let health plans licensed in one state sell coverage in another state.

McCain also spoke in favor of putting health records online and against mandates.

He said he would cap the deduction for employer-sponsored health benefits to pay for the tax credit.

Most U.S. residents “will be covered except for those who have these gold-plated Cadillac kinds of policies,” McCain said. “You know, like hair transplants; I might need one of those myself. But the point is that we have got to give people choice in America and not mandate things on them.”

Obama said that he would leave the current health finance system in place for U.S. residents who are happy with the health coverage they now have.

Obama said he would try to lower the cost of premiums about $2,500 per worker per year by investing in prevention and information technology.

Obama also spoke in favor of offering small businesses a 50% health insurance tax credit, and he said creating a health program similar to the federal employees’ program – which permits private insurers that meet plan requirements to compete for employees’ business – would offer the uninsured access to the same kind of health care that he and McCain now enjoy.

“Because there’s a huge pool, we can drop the costs,” Obama said. “And nobody will be excluded for pre-existing conditions.”

Obama rejected the idea of letting health insurers sell insurance across state lines.

If insurers licensed in one state can sell coverage in another, insurers “will find a state — maybe Arizona, maybe another state — where there are no requirements for you to get cancer screenings, where there are no requirements for you to have to get pre-existing conditions [covered], and they will all set up shop there,” Obama said.