Wall Street Journal Examines High-Risk Insurance Pools Proposed by Presumptive Republican Nominee McCain
02 06 08 - 19:10
The Wall Street Journal on Monday examined a proposal from presumptive Republican presidential nominee Sen. John McCain (Ariz.) to "bolster the role of high-risk pools" that market health insurance to individuals with pre-existing medical conditions.
The proposal would replace a tax break for employees who receive health insurance from employers with a refundable tax credit of as much as $2,500 for individuals and $5,000 for families for the purchase of private coverage. In addition, the proposal would include a federally funded Guaranteed Access Plan, which would seek to establish high-risk health insurance pools to help individuals who cannot obtain private coverage because of pre-existing medical conditions or no previous group coverage.
"McCain derides government-run health care, but the high-risk pools in existence now require a heavy dose of government intervention," the Journal reports. According to the Journal, fewer than 200,000 U.S. residents currently are enrolled in high-risk health insurance pools, which charge "high premiums and sometimes sharply restrict benefits." In 2006, premiums provided 61% of the funds for high-risk health insurance pools, with most of the remainder of the funds -- about $722 million, or an average of $3,800 per enrollee -- provided by state governments.
McCain chief policy adviser Douglas Holtz-Eakin said that, under the McCain proposal, the federal government might have to provide $7 billion to $10 billion to fund high-risk health insurance pools. However, experts maintain that the estimate is "nowhere near enough, particularly given the large number of people with pre-existing conditions who would need this help if employers send their workers out to the open market," the Journal reports.
"There's no way you can ever charge a premium that's going to pay the cost of this population," Douglas Stratton, chair of the National Association of State Comprehensive Health Insurance Plans, said. Sara Collins, a Commonwealth Fund assistant vice president, said of high-risk health insurance pools, "They tend not to work particularly well," adding, "States have really struggled to finance these adequately" (Meckler/Wilde Mathews, Wall Street Journal, 6/2).
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