Plan­ning ad­vances for high-risk pools, but not all states want it

States ad­vanc­ing plans for high-risk in­surance pools, but not ev­ery­one is ready—or will­ing—to make the dive

Modern Healthcare - - Editorial -

One of the first tests of how well the new fed­eral health re­form law will ex­tend cov­er­age to the unin­sured comes this sum­mer.

As early as July 1, the unin­sured with pre-ex­ist­ing health con­di­tions will be able to ap­ply for cov­er­age through tem­po­rary high-risk pools. These pools will be run by ei­ther the states or HHS and be op­er­a­tional un­til Jan­uary 2014, when in­surance ex­changes go on­line and other cov­er­age pro­vi­sions take ef­fect.

This tem­po­rary high-risk pool pro­gram is widely viewed as cru­cial to get­ting the most unin­sur­able peo­ple some re­lief right away. But a lot of unan­swered ques­tions re­main about how the pools will be struc­tured, and whether ev­ery­one who needs cov­er­age will be able to get it, and if the $5 bil­lion al­lo­cated to the pro­gram will be enough.

Also of con­cern is what will hap­pen to the nearly 200,000 peo­ple na­tion­wide who are cov- ered to­day through ex­ist­ing state-run high-risk pools—and who likely won’t qual­ify for bet­ter, lower-cost cov­er­age through the new pools.

“This pro­gram presents an op­por­tu­nity for peo­ple who have just been shut out of health in­surance, even if they could af­ford the premi­ums,” says Karyn Schwartz, se­nior pol­icy an­a­lyst at the Kaiser Fam­ily Foun­da­tion. “It will hope­fully de­crease the bur­den of un­com­pen­sated care.”

On April 2, HHS Sec­re­tary Kath­leen Se­be­lius sent letters to all states so­lic­it­ing their in­ter­est in run­ning a new high-risk pool with fed­eral fund­ing. Ac­cord­ing to HHS, 29 states and the District of Columbia have opted to run the pro­gram, while 19 states de­clined to par­tic­i­pate, mean­ing that HHS will op­er­ate the pro­gram in those states. Two states—Utah and Ken­tucky—had not yet de­cided at press time (See map, p. 29).

States that chose to run the pro­gram had un­til the end of May to sub­mit an ap­pli­ca­tion to HHS out­lin­ing how they will struc­ture it. Utah and Ken­tucky have both re­quested ap­pli­ca­tions, ac­cord­ing to HHS. The fed­eral agency is ex­pected to is­sue fur­ther guid­ance on the pro­gram in June, with the goal of hav­ing the pro­gram up and run­ning in July.

The pa­ram­e­ters, so far, are fairly broad. Those el­i­gi­ble must be cit­i­zens, na­tion­als or le­gal res­i­dents, have a pre-ex­ist­ing med­i­cal con­di­tion “in a man­ner con­sis­tent with guid­ance is­sues by the sec­re­tary” of HHS, and must have lacked “cred­i­ble cov­er­age” for at least six months.

What qual­i­fies as a pre-ex­ist­ing con­di­tion or “cred­i­ble cov­er­age” are yet un­known — and both could de­ter­mine how many peo­ple are el­i­gi­ble for the pro­gram.

For in­stance, what if a per­son has cat­a­strophic cov­er­age in the in­di­vid­ual mar­ket, say in a state such as New York, which doesn’t al­low in­sur­ers to deny peo­ple based on pre-ex­ist­ing con­di­tions? It’s pos­si­ble that some­one in that sit­u­a­tion could prove their cov­er­age is not cred­i­ble and switch into the new high-risk pool right away, says Sara Collins, vice pres­i­dent for af­ford­able health in­surance at the Com­mon­wealth Fund. But Collins cau­tions that the in­tent of the pro­gram is not to give bet­ter cov­er­age to peo­ple who al­ready have it.

HHS “views this as an in­terim so­lu­tion for peo­ple who don’t have cov­er­age,” she says.

That could leave peo­ple al­ready en­rolled in ex­ist­ing high-risk pools pay­ing higher premi­ums with skimpier cov­er­age, ac­cord­ing to dis­ease ad­vo­cacy groups. Cur­rently, 34 states op­er­ate high-risk pools, cov­er­ing nearly 200,000 peo­ple to­tal. These pro­grams dif­fer from state to state in terms of el­i­gi­bil­ity re­quire­ments and cost of cov­er­age. But by and large, the costs to en­rollees are higher than they will be in the new pools.

Stephen Fi­nan, se­nior pol­icy di­rec­tor at the Amer­i­can Can­cer So­ci­ety’s Can­cer Ac­tion Net­work, says the sit­u­a­tion is un­fair. “The new pro­gram was clearly in­tended to be a stop­gap mea­sure to pro­vide some re­lief to the ex­ist­ing unin­sured,” he says. “But they didn’t think it through care­fully. I don’t think the staff mem­bers in Congress thought the in­equity is­sue would arise.”

The min­i­mum ben­e­fit pack­age of the new pools will be de­ter­mined by HHS, prob­a­bly in June. Plans must cover at least 65% of health­care costs, and premi­ums must be set as if they are for a “stan­dard pop­u­la­tion,” not a high-risk one, ac­cord­ing to the health re­form law. Premi­ums can vary by age by no more than 4-to-1. They can also vary by fam­ily com­po­si­tion and geo--

Collins: HHS sees the pro­gram as an “in­terim so­lu­tion.”

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