St@teside

The majority of state-based high risk pools—and the federal fall-back risk pool for those states that opted not to establish their own—began accepting applications on July 1, 2010. According to www.healthcare.gov, 29 states and the District of Columbia opted to run their own programs, while 21 states are utilizing the federal fall-back, as depicted in this map. A few states are still working out the details of their high-risk programs, but all states are expected to have a high risk pool in place by the end of the summer.*

While the program will be a more affordable option than many of the existing risk pools, questions remain about the financing of the program and the interaction between the new pools and the existing ones.

A recent study by the Congressional Budget Office (CBO) estimates that costs for the program between now and January 1, 2014 would range between $10 and $15 billion. The amount that has been appropriated is $5 billion. While the study acknowledges the difficulty of making a good estimate before the details of the program were fully known, it is evident that states and the federal government will need to work together to limit benefits and enrollment in the absence of  additional resources. Staff at the United States Department of Health and Human Services (HHS) has said they plan to work with states to adjust benefits, deductibles, copayments and overall plan structure to “help the plan make it to 2014.”** Officials at HHS estimate that the program will cover about 350,000 people over the next three-and-a-half years. The CBO believes a cap on the number of people able to enroll in the program may be necessary if the scope of this program needs to be limited to this enrollment level.   

The interaction between the new federally-funded high risk pools and existing pools will vary by state, but they could create tension as the rules to the new program become more widely known. In the majority of states, the new risk pool will have better benefits for a lower cost per month. Premiums in the federally-funded program are expected to be on par with average premiums in a state, while premiums in state pools range between 125 and 200 percent of average rates. State programs also sometimes allow pre-existing condition exclusions and annual or lifetime benefit limits, unlike the federally-funded pools. Nevertheless, those who are covered in existing state high risk pools will not be allowed into the new program because there is a requirement that individuals be uninsured for six months before they can apply. Those losing access to employer-based insurance are also not eligible for coverage under the new risk pools.