High-Risk Health Insurance Pools for Major Medical Coverage Attracting Few « Health Insurance Advisory

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new healthcare reform lawThe new healthcare law, called the Patient Protection and Affordable Care Act (PPACA), represents comprehensive healthcare reform legislation signed into law on March 23, 2010. It contains numerous provisions designed to protect consumers and promote low cost medical insurance, including many new taxes to pay for the cost.

In this section of the site, you can also obtain the following information specific to your state: available medical insurance options, efforts to regulate medical insurance premiums, healthcare, the individual medical insurance marketplace and the new healthcare law.

Our objective is to help Americans make sense of the new healthcare law by explaining key provisions in plain English and assisting individuals, families and the self-employed in using this information to find and secure affordable medical insurance.

High-Risk Health Insurance Pools for Major Medical Coverage Attracting Few

Author: Pete S - Sr. Staff Writer | Nov 20 2010 | Government Pre Existing Condition Insurance Plan

After a few months of operation in most states, High-Risk Pools for major medical insurance, called the Pre Existing Condition Health Insurance Plan enrolled only 8,011 people. Funded by the federal governemt, this health plan is designed to provide affordable medical insurane to individuals with health conditions who are unable to qualify for individual medical insurance.

Although there are some exceptions, enrollment in most states as of November 1, 2010 was well below 10 percent of capacity, reported the New York Times on November 4, 2010 based on figures just released by the Department of Health and Human Services.

According to the New York Times article, after the healthcare law passed concerns immediately emerged that a $5 billion appropriation would not be enough to cover the hordes expected to enroll in a network of new insurance pools for people with pre-existing health conditions. The government’s health care actuary projected that hundreds of thousands of otherwise uninsurable people would rush to gain coverage this year, and that the money would be exhausted by 2012.

New York and Florida, for instance, have each enrolled fewer than 300, and 21 states have fewer than 50.  The slow start-up, which officials believe will accelerate next year, is cause for concern not only for the Democratic administration but also for the new Republican majority in the House of Representatives.  Although Republicans opposed the health care law as a whole, they have long embraced high-risk pools as an answer to the plight of the chronically uninsured.

The party’s presidential nominee in 2008, Senator John McCain of Arizona, called for a vast expansion of the pools, and House Republicans in this year’s campaign reiterated the call in their “Pledge to America.”

“The pools are our major solution,” said Representative John Shimkus, an Illinois Republican who is in line to become chairman of the health subcommittee of the Energy and Commerce Committee. Mr. Shimkus said Republicans had proposed spending $25 billion on risk pools over 10 years.

“If you give the states the power to use their money,” Mr. Shimkus said, “or to do cross-state compacts where they can build that pool, then I’m not one to say that doesn’t solve the problem.”

Administrators of the risk pools, which are formally called Pre-existing Condition Insurance Plans, point to a variety of explanations for low enrollment, including lack of awareness among a hard-to-reach target population, a requirement that applicants be uninsured for at least six months and premiums that, although set at market rates, are often unaffordable. Starting on Jan. 1, the Department of Health and Human Services hopes to draw more interest by giving consumers choices of plans with different costs and deductibles.

“We’ve had about 350 applications, and I would characterize that as less than expected,” said Amie Goldman, chief executive of Wisconsin’s risk pool and chairwoman of a national association of state risk pool directors. “We’re all committed to getting there and spending all $5 billion and helping as many people as possible. But it’s a new program, and you kind of have to roll it out.”

The program’s intent, however, was to fill a need quickly. By offering coverage to some of the country’s most medically desperate people, the risk pools were devised to serve as a bridge until 2014, when the law will require insurers to accept all applicants regardless of their health (that already applies to children under 19, under a provision that took effect in September).

Unlike most commercial insurers, the risk pools accept individuals with any of a list of risky health conditions, like cancer or hypertension.

As recently as April, the chief actuary for Medicare and Medicaid estimated that 375,000 people would enroll in the risk pools this year. In an interview, Richard A. Popper, director of insurance programs in the Department of Health and Human Services, deflected questions about whether he was disappointed in the current pace of enrollment.

“It takes a while for advocates and stakeholders to realize there’s this new plan,” Mr. Popper said. “We’re delighted the program is out there and making a difference in people’s lives and keeping people alive.”

Before the law took effect, 35 states already operated their own risk pools, insuring a total of 208,000 people. But many of those pools require waiting periods for coverage of certain ailments, and premiums are typically 125 percent to 200 percent of standard rates, often making the policies impractical or unaffordable.

The new pools authorized by the health care law do not have waiting periods (although applicants must be uninsured for six months) and premiums cannot be higher than normal rates. Out-of-pocket costs are capped at $5,950 a person, and there are limits on how much rates can vary with age.

Twenty-seven states opted under the law to run their own pools, while the federal government is administering the others. Premiums and benefit options vary by state. A recent study by The Commonwealth Fund, a nonpartisan health research group, found that monthly prices for a nonsmoking 50-year-old ranged from $240 for a $5,000 deductible plan in Utah to $1,006 for a $1,500 deductible plan in Alaska.

The study estimated that 6 million of the country’s 50.7 million uninsured might be eligible for the new major medical insurance pools.

Finding them is not always easy, and experience has shown it can be inefficient to market niche insurance programs through radio and television advertising. Instead, state risk pool directors said they were trying to get the word out to doctors, hospitals and insurance agents.

Several encouraged the federal government to invest more in marketing. Mr. Popper said there were no plans for broad-based national advertising.

“I really think that people are not aware of the federal pool, there’s no question about that,” said Kären J. Larson, director of the pool in Washington State. “Just going around in my daily life, people that you would expect to know, like providers, don’t know. It’s just too far down in the details of health reform.”

For more information regarding High-Risk Pools for individuals with pre-existing conditions who are unable to qualify for individual or self employed medical insurance, visit the Government Plans section at healthinsuranceadvisory.org.  If you cannot qualify for an individual medical insurance plan, we can help you secure health insurance for pre existing conditions.

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