Wall Street Journal Examines High-Risk Insurance Pools Proposed by Presumptive Republican Nominee McCain

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).

Puerto Rico Primary
Democratic presidential candidate Sen. Hillary Rodham Clinton (N.Y.) on Sunday won the Puerto Rico primary with 68% of the vote, compared with 32% for opponent Sen. Barack Obama (D-Ill.), CNN.com reports.

According to an exit poll of 1,545 Puerto Rico Democratic primary voters, 12% of voters cited health care as their most important issue in the election, compared with 60% who cited the economy and 25% who cited the war in Iraq. Among voters who cited health care, 75% supported Clinton, and 25% favored Obama (CNN.com, 6/2).

Nader Interview
Independent presidential candidate Ralph Nader in a Wall Street Journal interview published on Saturday said that Obama is "really a corporate Democrat" whose record is "not one of challenging corporate power." Nader said that the Obama health care proposal "lets the health insurance companies continue their redundant, wasteful, often corrupt -- in terms of billing fraud -- ways, ripping off Medicare." Nader said that he supports a single-payer health care system (Varadarajan, Wall Street Journal, 5/31).

Opinion Pieces
Several opinion pieces that address health care issues in the presidential election appear below.

• Luisa Morenilla, San Francisco Chronicle: Many U.S. residents do not purchase health insurance because of an "unwillingness to spend ... limited money" on coverage, an indication of a need for an individual coverage mandate, as Clinton has proposed, Morenilla, a University of California-Berkeley journalism graduate student, writes in a Chronicle opinion piece. "Not buying health insurance is the most selfish thing you can do," as the cost of health care for those without coverage "would be transferred to those who do have insurance, in the form of higher ... premiums and co-pays and to everyone in the form of higher taxes," according to Morenilla. Obama "argues that Clinton's mandate is not a mandate at all if Americans are unable to afford health coverage, yet will be punished if they don't buy it," but "I am confident Clinton will be able to address this dilemma" because of her "much keener understanding of the need for universal health coverage than Obama," she adds (Morenilla, San Francisco Chronicle, 6/2).
  
  
• Lanny Davis, Wall Street Journal: Neither Clinton nor Obama is "able to make a facts-based case that they represent a significant majority of grassroots Democrats," but "the final argument for Hillary comes down to three points," one of which is her health care proposal, Davis, special counsel to former President Bill Clinton, writes in a Journal opinion piece. He adds, "Clinton's position on health care gives her an advantage" over McCain because her proposal, based on "private insurance and individual choices," is a "stark contrast" to his "total reliance on private market insurance, HMOs or emergency rooms for the 45 million or more uninsured." The Obama health care proposal, "while laudable in its objectives, does not mandate universal care and, arguably, won't challenge Sen. McCain as effectively as will Sen. Clinton's plan," Davis writes (Davis, Wall Street Journal, 5/31).
  
  
• Floyd Norris, "High & Low Finance," New York Times: "If the Democrats win the election this year and are able to enact a health care plan that extends adequate coverage to all Americans, the loser could be the Army" because the military would no longer use "generous health benefits" as an incentive in recruitment campaigns, Norris writes in his blog. According to Norris, in the event that "we get a real health care plan for all Americans, it might require" a new G.I. education benefits bill "just to keep fighting in Iraq and Afghanistan." He concludes, "The backers of health care legislation do not want to hurt the Army, but that is what could happen" (Norris, "High & Low Finance," New York Times, 5/30).