HHS To Cut Premiums in State High-Risk Pools To Increase Enrollment

Seeking to spur enrollment in its high-risk insurance pools, HHS on Friday announced that it will lower plan premiums by about 20% in 2011, Kaiser Health News reports (Galewitz, Kaiser Health News, 11/5).

Background

The federal health reform law established the Pre-Existing Condition Insurance Plan to provide coverage to individuals with pre-existing conditions prior to 2014, when private insurers are required to accept all applicants. However, the pools have enrolled fewer residents than expected since the plans began operating this summer.

California, 22 other states and the District of Columbia have opted to operate their own high-risk pools, while the federal government is running the pools in some states. To qualify for PCIPs, individuals must:

• Be U.S. citizens or legal residents;
• Have been uninsured for at least six months; and
• Have been denied insurance coverage because of a pre-existing condition.

In April, federal officials estimated that about 375,000 residents would gain coverage through the high-risk pools. Some experts questioned whether the $5 billion allocated to the program would be sufficient to cover those residents.

However, California has received about 500 applications for its high-risk pool, even though the state has the funds to cover about 20,000 residents, according to a state official. Wisconsin has the capacity to cover 8,000 residents, but had received fewer than 300 applications as of early September (California Healthline, 10/4).

Changes to Plan Options

The program currently offers a single standard plan with a combined medical and pharmacy deductible of $2,500. Next year, plan options will include:

• The standard plan with two separate deductibles of $500 for drugs and $2,000 for medical care;
• The so-called Extended Plan with a deductible of $1,000 for medical care and $250 for drugs;
• The health savings account option, which includes a single $2,500 deductible; and
• The child-only option, which offers coverage for children up to age 18 (Reichard, CQ HealthBeat, 11/5).

Richard Popper -- director for the Office of Insurance Programs in HHS' Office of Consumer Information and Insurance Oversight -- said enrollment "is beginning to accelerate and with these changes we expect it to continue to accelerate" (Kaiser Health News, 11/5).