McCain’s Health Plan, Like Bush’s, Slashes The Uninsured’s Hospital Safety Net

Douglas Holtz-Eakin told the New York Times that, to attempt to cover people who fall through the (rather substantial) cracks in his health care plan, McCain would help pay for state “high-risk pools” by redirecting money “from existing federal programs that pay for uncompensated medical care, primarily in hospitals.”

Translation: Holtz-Eakin wants to eliminate some portion of the $7.8 billion in federal support for “Disproportionate Share Hospitals,” or DSH, which serve especially high numbers of poor and uninsured patients. This money is “the largest source of federal support for uncompensated care for uninsured patients.”

States across the country have used DSH money to provide “essential funding to many safety net hospitals” and “maintain access to health services for low-income patients.” States are already fighting back against Bush’s proposed sweeping cuts to Medicaid and changes to health regulations that shift costs to state and local governments, and John McCain is offering more of the same.

As a study by the National Health Policy Forum concludes, “in the absence of a viable plan to broadly expand health insurance coverage, support for providers that serve low-income patients will become increasingly critical.” But John McCain’s plan would leave millions of Americans without health insurance, so his disregard for DSH funds is a bit disturbing.


McCain’s proposal is very similar to a Bush proposal known as “Affordable Choices,” which encourages states to take their DSH money and use it to create “subsidies that uninsured people could use to help pay for ‘basic private coverage’” — like McCain’s “high-risk pools.”

Here’s the trouble: It’s only appropriate to consider DSH cuts if you’ve got a plan to cover everyone who might show up to a hospital uninsured. But there’s not enough money in DSH payments to cover all those who need insurance, and the coverage McCain would push for with the money would be “inadequate and inaccessible.”

A 2002 study of “high risk pools” in 30 states found that, for folks with pre-existing conditions, “the pools mirrored the problems of the individual market:” waiting periods, higher-than-market-rate premiums, substantial deductibles and co-pays, and limits on mental health and maternity care.

McCain is proposing shredding the safety net of last resort (hospitals who offer care for the uninsured) without making sure everyone has got a parachute by providing a plan for universal coverage.