Senate Committee Approves Funding for Insurance Pools for High-Risk Individuals

The Senate Health, Education, Labor and Pensions Committee on Wednesday approved a bill (S 2283) that would provide funding for grants to states to create health insurance pools for high-risk individuals, CQ Today reports. The bill would reauthorize $15 million in seed grants for FY 2004 and FY 2005 for states launching high-risk insurance pools. In addition, the bill would provide $75 million in grants for fiscal years 2005 through 2009 for states that currently operate high-risk pools, with two-thirds of the $75 million eligible for use to offset administration costs for the pools. The remainder of the funding for existing high-risk pools could be used to reduce premiums, expand benefits, offer subsidies to low-income members or for "other consumer benefits," CQ reports.

Funds that are not spent would be used to create new grants, rather than returned to the Treasury. "These pools are the last resort for more than 172,000 Americans who are uninsured and have existing health conditions, such as cancer, diabetes and other chronic illnesses, that make purchasing insurance on their own impossible," committee Chair Judd Gregg (R-N.H.) said. He added, "While high-risk pools are not intended to solve all the problems of our health care system, they provide critical assistance, in the form of private health insurance, to those who are most likely to fall through the cracks today."

The state-funded, high-risk pool programs were developed in 2002 by the Trade Adjustment Assistance Reform Act to help U.S. residents who have difficulty getting private health insurance.

Sixteen states established high-risk pools before the trade law, and four more have created or are creating pools since the law was enacted. In 2003, the trade law offered $20 million in seed grants to states that set up high-risk pools, but some state officials said meeting requirements was "too cumbersome," CQ reports (Adams, CQ Today, 9/22).