McCain Grapples With Gaps in Health Plan
Adviser Says McCain Critics Are Unduly 'Scaring People'
While McCain has begun to outline his plan for Americans with pre-existing conditions, he has not made a final decision as to who would qualify for help.
"The senator is still working through the details of the exact cut-offs and eligibility requirements," said Holtz-Eakin. "The senator is going to make his final decision on eligibility criteria coming up in the next couple months."
Funding Depends on Medicaid Savings
One possibility floated by Holtz-Eakin would be to subsidize the private insurance of Americans with pre-existing conditions earning less than $41,600 per year or $88,800 per year for a family of four.
"Individuals, at say 400 percent of the federal poverty line or below, would get increasing amounts of help in order to afford these policies," said Holtz-Eakin.
McCain's top policy adviser says that the federal government and states will pay for the new subsidies for people with pre-existing conditions by achieving savings in Medicaid, the federal-state health-care program for the poor.
"McCain's proposal will be to use some of the savings that would come out of the Medicaid program, because people are now in private insurance, and to develop a federal backstop -- a program that would give high cost individuals an insurance policy," said Holtz-Eakin. "Insurers that participate in the program would receive higher premiums."
McCain's health plan would end the tax deduction for employer-provided health insurance and replace it with a refundable tax credit worth $2,500 per individual and $5,000 per family.
The Arizona senator aims to make health insurance more affordable by allowing insurers to sell slimmed-down benefit-packages across state lines.
He also is hoping to lower overall health-care costs by shifting Medicare payments away from "episodic service care" and toward a system that rewards "care coordination."
It is unclear whether the Medicaid savings McCain envisions would put enough "money on the table" to persuade insurers to accept those with pre-existing conditions at an affordable price.
"Regardless of how you set up the trust fund you have to fund it appropriately and for me that will be the biggest issue," said Mohit Ghose, a spokesman for America's Health Insurance Plans, a trade group representing insurers. "There has to be some money as an upfront investment."
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