Reform Law Might Not Allot Enough for High-Risk Insurance Pools
The $5 billion set aside for the high-risk health insurance pools through the new health reform law might not be enough to cover the costs of all U.S. residents who will qualify for the program, according to an analysis by the Center for Studying Health System Change and underwritten by the National Institute for Health Care Reform, the New York Times reports (Sack, New York Times, 5/26).
So far, 29 states have volunteered to run their own high-risk pools, while 19 states deferred to the federal government and two still are undecided (Weaver, Kaiser Health News, 5/27).
According to the report, an estimated 5.6 million to seven million U.S. residents with pre-existing conditions will be eligible for the high-risk pools (New York Times, 5/26).
In 2008, there were 199,418 U.S. residents enrolled in state-financed high-risk pools in 35 states. Actuaries have estimated the average cost of subsidizing coverage for people in existing high-risk state pools was below $5,000 annually per participant.
Based on those numbers, the $5 billion provided for the program would cover 300,000 U.S. residents over three years, on top of the nearly 200,000 already enrolled in the pools.
However, premiums for those in existing state high-risk pools are as much as 200% higher than premiums for privately insured people. Under the new reform law, the pools would be required to charge premiums similar to those for healthy people in the same market, meaning the program would pick up more of each participant's costs in order to bring premiums equal to those for healthy people (Kaiser Health News, 5/27).
As a result, the funding might not cover as many people. According to the report, the money might cover as few as 200,000 people annually. Further, the funding gap could cause lawmakers to freeze enrollment in the pools, limit access and benefits, or increase premiums, according to the report.
Jessica Santillo, an HHS spokesperson, questioned the analysis' figures (New York Times, 5/26). She said, "We believe the cost per person will be lower, and the target population not as large," adding that the report, "even by its own conservative estimates, suggests that the proposal would double the number of people with major health problems who are currently helped by state high-risk pools" (Kaiser Health News, 5/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.