The High Costs Of High-Risk Pools

Today, NPR’s Julie Rovner examined the implications of Sen. John McCain’s (R-AZ) proposal to insure uninsurable Americans — individuals who are unable to obtain coverage in the private market due to their medical history — through state-run high risk pools. As Rovner explains, high-risk pools are plagued by waiting periods, premiums that are out of reach for many families, substantial deductibles and co-pays, and limits on mental health and maternity care.


The McCain campaign responds to criticism that high-risk pools provide inadequate coverage and access by suggesting that their Guaranteed Access Plan (GAP) is modeled on the best examples in the states, namely the Minnesota high-risk pool program. But Minnesota, like the other 35 states that run high-risk pool programs, limits eligibility to control costs:In 2006, the Minnesota high-risk pool cost $8,116 per enrollee (21% of the average income) and provided coverage to just 30,000 people. In short, in most of these states, the programs’ prohibitive premiums, deductibles and waiting periods for pre-existing conditions keep many uninsurable Americans from obtaining coverage.

The McCain campaign, recognizing the program’s limitations, says it “might” subsidize GAP “to those making up to four times the federal poverty level, or $41,600 for a single person” but has not made a decision about “waiting periods for pre-existing conditions.” But “subsidies already cover around 50 percent of high-risk pool costs, and expansion of these programs could cost $100 billion.”

With America in the middle of a financial crisis, the likelihood of subsidizing high-risk pools seems like a distant possibility.

UPDATE: Peter Harbage examines Alaska’s high-risk pool program here.