The McCain Campaign’s Latest High-Risk Pool Variation

During Douglas Holtz-Eakin’s appearance on CNBC’s Squawk Box yesterday, John Harwood questioned Sen. John McCain’s (R-AZ) ability to provide insurance for individuals whose pre-existing conditions disqualify them from coverage in the individual marketplace. Harwood argued that McCain’s proposal to federally subsidize high-risk pools to the tune of $7 to $10 billion is not “really adequate to get those at-risk into health insurance.” Holtz-Eakin begged to differ:

The Senator’s commitment was to devise a best practice…so his idea was let’s look at the practices, get the one that works and make the commitment to fund it. ’Cause you know, in the end these are high-cost patients who might need more money. So his 7 to 10 estimate, it was a ballpark estimate. It could be higher. The commitment is to get the job done…It could be $20 billion and you could make it work if you do the rest of the reforms in the McCain plan. The important thing is to change the cost of care, and there’s a long list of reforms that the Senator’s proposed. It means changing incentives.

Watch it:

Holtz-Eakin is spinning his wheels as the McCain campaign scrambles to explain how their individual-market centric health care proposal would deliver health coverage to the millions of Americans with chronic illnesses.The McCain health care plan has been a patchwork of conflicting proposals from the very beginning:

– In April, Elizabeth Edwards, a Senior Fellow at The Center for American Progress Action Fund, astutely noted that McCain’s plan offered nothing for the sickest Americans.

– In response to her criticism, McCain offered his current high-risk pool enhancement plan, G.A.P.

– Seven days ago, senior adviser Carly Fiorina floated the idea of establishing “a nonprofit corporation that would contract with insurers” and “partner with other state plans to broaden insurance pools” and cover the sickest Americans.

Holtz-Eakin’s funding boost is the latest inadequate variation. As the Tax Policy Center pointed out, McCain’s high-risk pools would need about $100 billion a year to “prevent large losses in insurance coverage among the sick and needy.”


Implementing “the rest of the reforms in the McCain plan” would only overburden high-risk pools. As The Wonk Room previously pointed out, McCain’ plan to deregulate the insurance industry and push healthy Americans into the individual market could shift sick people — who can’t find coverage in the individual market or afford the increasing cost of insurance in their old risk pools once the healthy people have opted out — into high-risk pools.

These programs don’t spread risks and costs across a mixed pool population of healthy and sick people and would force millions of Americans with pre-existing conditions to pay astronomical insurance premiums and deductibles.

Thus, while McCain’s proposals have changed, his message has remained the same: don’t get sick.