An article in today’s New York Times analyzes Sen. John McCain’s (R-AZ) approach to insuring Americans with preexisting conditions and concludes that the senator’s plan to federally subsidize state-run high risk pools is an inadequate solution to providing coverage to patients who can’t find insurance in the unregulated individual insurance market:
Though high-risk pools have existed for three decades, they cover only 207,000 people in a country with 47 million uninsured…Premiums typically are high, as much as twice the standard rate in some states, but are still not nearly enough to pay claims. That has left states to cover about 40 percent of the cost, usually through assessments on insurance premiums that are often passed on to consumers. Health economists say it could take untold billions to transform the patchwork of programs into a viable federal safety net.
The Wonk Room has long argued that McCain’s reliance on high risk pools is both expensive and unrealistic. Simply put, since high risk pools are populated by individuals whose pre-existing medical conditions require expensive treatments, states look for ways to limit participation. As a result, states “restrict availably, affordability, and adequacy of coverage.”
As Karen Pollitz, the health care expert quoted in the New York Times, argued last week at the Wonk Room’s McCain University event:
These programs [high risk pool programs] are very expensive…because [sick people] account for all of the spending. So these are very expensive programs for states to run…and so states look for ways to restrict these programs and in particular they have limited eligibility rules in some states, the premiums that they charge are exceedingly high.
McCain doesn’t fully comprehend the costs of covering patients through high risk pools. While he has proposed spending $7 to $10 billion to subsidize high risk pools, Pollitz notes in the article, “I do not for a minute think it will cost 7 to 10 billion dollars a year. It may cost 7 to 10 billion dollars a week.”
Ironically, for a candidate who proclaims to be concerned about the rising costs of health care coverage, McCain is proposing the most inefficient and expensive program possible.