Regulators Face Challenges in Creating High-Risk Insurance Pool

As health insurance regulators work to create a high-risk insurance pool called for by under the new health reform law, the complexity of the issue and a 90-day deadline for its establishment are presenting challenges for Obama administration officials, the Wall Street Journal reports.

The health reform law provides $5 billion for the program and establishes broad guidelines for eligibility and structure.

High-Risk Pool Details

To qualify for the new pool, uninsured residents with pre-existing health conditions must be without insurance for six months and will be required to pay premiums that are similar to those paid in a "standard population" for insurance.

An average of at least 65% of the cost of participants' care must be covered under the new insurance pool, and out-of-pocket charges will be capped at $5,950 annually for individuals or $11,900 annually for families. The high-risk pool will expire in 2014, when other provisions regarding residents with pre-existing conditions take effect.

Weighing Options

An Obama administration official said HHS will begin the process by evaluating existing resources, including state pools for high-risk residents.

The Journal reports that the 35 states with such pools often have high premiums and sometimes do not offer coverage for pre-existing conditions for an initial period.

Some groups -- including the National Association of State Comprehensive Health Insurance Plans -- are urging federal officials to create a new program that would work through the states' programs, although such a plan could require legislative action on both the federal and state levels.

A federal risk pool could face funding shortfalls and could take longer than 90 days to set up, according to Stephen Finan, senior director of policy for the American Cancer Society's Cancer Action Network (Wilde Mathews, Wall Street Journal, 3/27).