The Wall Street Journal Forgot High-Risk Pools’ History Of Failure

The Wall Street Journal published a misleading editorial about the Republican Party’s American Health Care Act (AHCA), pushing the false claim that high-risk pools “will ensure everyone can get the care they need” and that they “are a fairer and more equitable solution” than existing patient protections enshrined by the Affordable Care Act (ACA).However, high-risk pools have a long history of failure and the current AHCA legislation would leave a funding shortfall of billions of dollars for these high-risk pools, thereby limiting accessibility. Multiple Republicans have also admitted that the legislation would not protect those with pre-existing conditions.

The GOP released an amendment to its extremely unpopular health care bill, authored by Rep. Tom MacArthur (R-NJ), that weakened the ACA’s patient protections in an attempt to lure the right-wing Freedom Caucus into supporting the AHCA. In particular, the amendment included provisions to allow states to apply for waivers that would allow them to eliminate the ACA’s mandated protections for individuals with pre-existing conditions and the essential health benefits (EHBs) package in exchange for setting up high-risk pools.

The Wall Street Journal’s editorial board claimed to “explain how the GOP reform would work in practice” given that “insurance coverage for pre-existing health conditions can be confusing.” The article presented high-risk pools as the solution to pre-existing conditions coverage, the salve to “pre-existing conditions panic” and claimed that the “GOP plan will ensure everyone can get the care they need”:

Why might a Governor prefer such an arrangement over the ObamaCare status quo? Well, the law’s price controls are a raw deal for most consumers, which leads to a cycle of rising premiums and falling enrollment. Average premiums rose by 40% or more in 11 states this year, and insurance markets in states like Tennessee, Kentucky and Minnesota are in crisis.


High-risk pools are a fairer and more equitable solution to this social problem, rather than hiding the cost by forcing other people to pay premiums that are artificially higher than the value of the product. The waivers also include protections for people who renew continuous coverage from major premium increases if they become ill.

Liberals are inflating the pre-existing conditions panic with images of patients pushed out to sea on ice floes, but the GOP plan will ensure everyone can get the care they need. Republicans can win this argument, but first they need to join the debate and explain their ideas.

High-risk pools are not new -- they existed in 35 states prior to the ACA. History shows they represent an incredibly flawed approach to providing coverage for the most vulnerable because they are chronically underfunded, outrageously expensive, and they provide insufficient access to care.

High-risk pools are almost never sufficiently funded because they cost an exorbitant amount to administer. High-risk pools flip the normal logic of insurance pools -- which spreads risk throughout the pool between healthy and sick individuals -- and instead consolidates all the costliest individuals in one pool. While this might reduce costs for healthy individuals, who are no longer grouped with chronically ill individuals, the high-risk pool requires an incredible amount of funding in order to function as viable health insurance. New estimates from the Center for American Progress show that the $130 billion of risk pool financing included in the AHCA is woefully insufficient to properly cover these individuals and, in fact, “would leave a $20 billion shortfall annually.” This underfunding is typical of high-risk pool proposals as history shows they almost always cost more than the funding allocated, and within the pools, coverage becomes exceedingly expensive. As MSNBC medical contributor Dr. John Torres explained in a May 2 interview, given the high number of individuals with a pre-existing condition -- nearly half of all Americans, and roughly 86 percent of people aged 55 to 64 -- average premiums could cost over $25,000 a year.

Despite The Wall Street Journal’s claims, high-risk pools provide dramatically insufficient coverage and states that have attempted high-risk pools have needed to impose limits on the types of coverage offered and on how individuals could access coverage given the cost. Kaiser Health News’ Julie Rovner detailed the history of high-risk pools in her “Sounds Like A Good Idea?” video series, noting that empirically, “pools got so expensive for states that they had to impose waiting lists for coverage.” Previous high-risk pools also imposed limitations on access to care, often “refus[ing] to pay for services associated with a patient’s pre-existing conditions in the first months of their enrollment.” The Physicians for a National Health Program denounced the GOP’s high-risk pool push, explaining that plans in these pools historically “offered much less than optimal coverage, often with annual and lifetime limits, coverage gaps, and very high premiums and deductibles.”

The problematic history of high-risk pools highlights just one of the many negative aspects of the MacArthur amendment which is why most major health care groups including the American Medical Association, the AARP, the American Hospital Association and America’s Essential Hospitals, and many others have come out against the bill.

Even conservatives recognize that high-risk pools won’t work. Rep. Billy Long (R-MO) declared that he would vote “no” on the AHCA because “the MacArthur amendment strips away any guarantee that pre-existing conditions would be covered and affordable.” During WHTC Morning News, Rep. Fred Upton (R-MI) said that he “supported the practice of not allowing pre-existing illnesses to be discriminated against from the very get go” and that the MacArthur amendment “torpedoes that,” which is the reason he “cannot support this bill.” When questioned by MSNBC’s Ali Velshi about whether or not pre-existing conditions are covered by the AHCA, conservative pundit Rick Tyler admitted “they’re not.”