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."
Democrats have not yet settled on a presidential candidate, but a spokeswoman for the Democratic National Committee vows to make pre-existing conditions an issue this fall.
"This is a major vulnerability for McCain," said the committee's communications director Karen Finney. "He is going to be the fiscal discipline candidate and they can't tell you how they are going to pay for it and they can't tell you how it would work. That's obscene."
ABC News' Jacqueline Klingebiel and Talal Al-Khatib contributed to this report.