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High-Risk Health Insurance Pools Miss Deadline

Source: BestWire

Posted on 28 Jun 2010

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Federally backed high-risk health insurance pools have missed the June 21 deadline to be up and running under the new U.S. health care reform law enacted in March.

Pool coverage should start by July 1, which means another missed deadline, J.P. Wieske, acting executive director of the Council for Affordable Health Insurance, said in an e-mail.

As of early May, 18 states had declined to run their own pools for residents with pre-existing health conditions and chose to have the federal government run them instead.

States that elected to have the U.S. Department of Health and Human Services run the pools are Alabama, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Louisiana, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia and Wyoming, the federal agency said.

There were 30 states, including the District of Columbia, that intended to operate their own high-risk pool programs.

In addition, North Carolina's program will be offered July 1, Richard Cauchi, program director, health, for the National Conference of State Legislatures, said in an e-mail June 24.

Utah law has made implementation difficult, so no decision has yet been made, Wieske said. A bill, signed by Gov. Gary Herbert in March, prohibits a state agency or department from implementing federal health care reform passed by the U.S. Congress after March 1, 2010, unless a state agency reports to the Legislature regarding costs and impact on state reform efforts.

States that have opted into the federal pool may be in final contract negotiations with the federal government, Wieske said. "One of the sticking points, we have heard, was state responsibility to continue to pay for benefits after the federal money runs out," he said.

Attempts to speak with the Department of Health and Human Services were unsuccessful.

The high-risk pool program is to be established with $5 billion allocated to states by July 1 in the same formula used for the state Children's Health Insurance Program (BestWire, April 5, 2010). It's scheduled to shut down in 2014, when health insurers are banned from denying coverage to people with pre-existing conditions.

Most of the states opting out have Republican governors. Florida, which started a lawsuit to block the reform law, said in early May it wouldn't use federal funding to form its own pool.

Many states already had a high-risk pool, but instead of funding those pools with federal money, Congress decided to start over -- a big mistake, Wieske said, noting the pools "are poorly designed and poorly funded."

HHS Acting Secretary for Public Affairs Jenny Backus has said the federal pool program is state-friendly and provides resources and flexibility. "Whether states create these pools or the federal government creates them for states, the pools will be paid for by 100% federal dollars and most importantly -- uninsured people around the country will soon have access to another affordable coverage option," she said in a statement (BestWire, May 3, 2010).

The council has always supported high-risk pools because they provide "a vital safety net," Wieske said. They could have been an alternative to the more costly guaranteed issue and community rating regulations, and the mandate for individuals to buy health insurance that kick in starting in 2014, he said.