States try it again
New methods tried to lure uninsured to high-risk pools
States are exploring ways to boost enrollment in a federal program that provides health insurance to the uninsured with pre-existing conditions amid lagging public enthusiasm.
Proposals to encourage participation include having private foundations pick up part of the monthly premium costs, reducing premiums and increasing plan deductibles.
This month, HHS released enrollment figures for the program, called the Pre-existing Condition Insurance Plan. It was created in 2010 as part of the federal healthcare reform law and is funded with $5 billion. It sunsets in 2014, when insurers will no longer be able to deny coverage because of pre-existing conditions.
As of Feb. 1, about 12,000 people nationwide had enrolled. That’s far less than anticipated; last summer, Medicare’s chief actuary predicted enrollment would top 375,000 by the end of 2010. HHS runs the program in 23 states and the District of Columbia; the remaining states operate the program themselves.
States say there are three primary barriers to getting people enrolled: the cost of premiums; a provision in the law requiring that qualified applicants be uninsured for at least six months; and lack of awareness about the program.
“The main obstacle is the premium costs,” said Scott Wilkerson, president and CEO of Physicians Health Plan of Mid-Michigan, which runs the program for the state. “It’s unfortunate because it is a good program.”
The Michigan plan had only 163 enrollees as of mid-February, Wilkerson said. He estimates that it could handle a maximum of 3,500 enrollees, with a budget from HHS of $141 million over the three-year life of the program. Monthly premiums range from $172 to $687, with a $2,500 deductible and an out-of-pocket limit of nearly $6,000.
Since the program launched in Michigan three months ago, claims costs have totaled about $700,000 for the 163 enrollees. “I’m not surprised,” Wilkerson said. “The whole point is these people have significant health problems.” Members include those diagnosed with cancer left untreated for half a year because of lack of insurance, and those needing surgeries because of longstanding untreated conditions, he said.
Michigan and other states are working with the federal government to develop new lowercost products to boost enrollment. Physicians Health Plan is rolling out a different benefit design in 30 to 60 days that includes a higher deductible and lower monthly premium, for instance. The plan is also reaching out to foundations and other philanthropic groups that might be willing to pick up part of the premium costs to members, Wilkerson said.
The Patient Protection and Affordable Care Act requires that premiums for the program be set at market rate, so states are unable to offer deep discounts. Last fall, HHS issued guidance to states on accepting third-party funding to subsidize the premium costs. HHS is concerned about employers dumping patients into the pools or hospitals subsidizing coverage to increase their own bottom lines. However, third-party subsidies are allowed under the law, and HHS has told states it will monitor any such arrangements.
In Oregon, which has also seen slow enrollment, subsidies are already available. The state’s Family Health Insurance Assistance Program pays for between 50% and 95% of the cost of monthly premiums to some participants with low incomes.
Today, Oregon has 546 enrollees in its plan. In its first three months, the state paid out about $500,000 in claims. Last summer, the state predicted it would have to go to a waiting list or cap by this spring because of high demand. But the program can still take many more people. HHS gave Oregon $66 million to cover the three-year life of the program.
“In some ways it’s good that our projections are not coming true,” said Don Myron, program manager of the Oregon Medical Insurance Pool at the state Office of Private Health Partnerships. “This prolongs the length of time we can accept new people in.”
Oregon still anticipates going to a wait list at the beginning of 2013 and has no intention of lowering premiums or changing the program’s design. “When you look at the populations in the pools, they are very high users of healthcare,” Myron said. “If you are going to use the insurance a lot, it makes sense to pay a higher premium.”
Under federal law, enrollees must be U.S. citizens. This has also been a barrier to applicants, Myron said, though Oregon also runs a state-funded high-risk insurance pool that accepts non-citizens.
California is starting to see an upturn in applications. At the end of January, 1,352 people were enrolled in the pool. The state has had nearly 2,600 applicants in the past year, including 551 in the past month, according to the California Managed Risk Medical Insurance Board, which administers the program.
Still, California estimated it could accept up to 23,000 people into the program. The state is exploring a low-income subsidy or premium assistance, according to a board spokeswoman.
Colorado, which has 493 enrollees, has no immediate plans to lower premiums and raise deductibles, but that could change. “It’s a conversation that’s been discussed here as well as nationally,” said Jon Pushkin, spokesman for GettingUsCovered Colorado, the state’s preexisting condition insurance plan, operated by Rocky Mountain Health Plans.
Meanwhile, HHS announced further initiatives to educate the uninsured who might benefit, including an outreach effort with the Social Security Administration. HHS has not yet released claims data on the program.
Some states, including Oregon, Texas and Washington state, now require insurance companies that deny people coverage because of pre-existing medical conditions to inform them about the federal program. WellPoint, UnitedHealth Group, Humana and several Blues plans have also agreed to include this information in letters to denied applicants.