High-Risk Pools & the States: Is Opting Out the Wiser Course?
The Affordable Care Act allocates $5 billion, starting July 1, for temporary high-risk insurance pools (HRPs) that will make coverage available to U.S. citizens with preexisting conditions who have been uninsured (or without “creditable coverage”) for the last 6 months or more. See HHS info here.
States have been given the option to manage their own plans or to opt out and let HHS administer their plan. Nineteen states have announced they will opt out, and twenty-eight have declared they will administer their own plans. (A couple of states still have not decided, though the deadline was April 30.)
Here’s how the states break down (from the National Conference of State Legislatures):
Click to enlarge
The pattern here undeniably presents the appearance of political maneuvering—blue states cooperating, red states opting out. Igor Volsky has noted the irony that Republican state governments opting out of HRP administration are in effect encouraging the expansion of the federal government and inviting more federal involvement in their states’ healthcare systems. But Tim Jost, with his nonpareil command of the subject, finds plenty of reasons why a state would sensibly opt out:
Nineteen states chose to opt out, requesting the federal government to operate the program within their state. Although this choice was largely reported as politically driven, and it undoubtedly was in some states such as Georgia, in fact the complications of coordinating a federal high-risk pool with existing state high-risk pools and guaranteed-issue programs will be quite considerable in many states. Members of the existing state high risk pool are by definition not immediately eligible for the new PPACA risk pool because they are not uninsured. Some states will, it would seem, have to operate two risk pools, which will probably have different premiums, benefits, and cost-sharing structures. Moreover, the statute only provides $5 billion in funding for the program, which the Centers for Medicare and Medicaid Services Actuary estimates will be exhausted within one to three years. It is, therefore, impressive that three fifths of the states are willing to take responsibility for the risk pool.
As a resident of Georgia and supporter of health reform, I’m not at all troubled that HHS will be administering Georgia’s high-risk pool. The federal money funding the program is the same either way. And Georgia is one of the fifteen or so states with no existing HRP, so it has no established expertise or infrastructure in this area. And, let’s face it, if Georgia’s leaders don’t really believe in the program—if their hearts just aren’t in it—it’s not likely to be much of a success. Georgia’s is one of our nation’s many dysfunctional state governments, and it is hard to imagine how an important new program like this would receive the attention it needs. No, much better to let the feds handle it.
Georgia’s awareness of its own limitations in this regard has been, I’d say, a rare display of wisdom on its part.
Comments
3 Responses to “High-Risk Pools & the States: Is Opting Out the Wiser Course?”
Leave a Reply
About Me
- I write this blog.
-
My twitter feed:
Mr. Hufford,
My name is Shane Bruce and I am running for the Office of Commissioner of Insurance this year in Georgia under the Libertarian Party. As a candidate, I am developing my position on the issue of High Rick pools in Georgia for our citizens who suffer from pre-existing conditions and are not profitably insurable for the underwriters in our state.
I am not an insurance professional, I am a citizen politician making his first run for office. I intend to develop a policy stance on this issue that does not abandon our citizens in need and can reconcile with the stated Libertarian objectives of Smaller Government, Lower Taxes and More Freedom. If possible.
My own research so far indicates that this is well neigh impossible. I have several questions I have not located any answers for and wonder if you could assist me.
- How many Georgian’s would use the high risk pool if it was funded?
- What would the premiums be? 100% higher? 200% higher? 1000% higher?
- Do our 45 state mandates have any role to play in this?
- Does our Health insurance premium tax influence this issue?
- What might be the best mechanism to insure our citizens that need this type of coverage?
I apologize for some many questions, but I really want to get this right. My current opponents seem to think that condemning a percentage of our citizens to misery is quite alright. I don’t agree with that. There has to be a way that all of our people can have access to healthcare regardless of the hands they’ve been dealt.
Regards,
Shane Bruce
Libertarian Candidate for Commissioner of Insurance
Mr. Bruce:
Regarding the new federal high-risk pool program, you should be aware that it is already in effect as of July 1. It’s a done deal. And because Georgia has opted out of administering the program, the U.S. Dept. of Health and Human Services will be offering high-risk Georgians coverage through a new national program called the Pre-Existing Condition Insurance Plan (PCIP). See the HHS fact sheet I linked to above for more info. Better yet, see the new HHS web portal at healthcare.gov.
So, the ship has already sailed on that one. It’s no longer an issue for Georgia’s Insurance Commissioner.
I do not know how many Georgians are eligible, but national estimates range from 200,000 to 375,000. Note that the PCIP *is* funded—Congress allocated $5 billion for it, though that may not be enough to meet the program’s needs through December 2013. HHS estimates (unofficially) that Georgia’s share will be about $177 Million.
Georgians can already apply for coverage under the program at http://www.pcip.gov/. According to the website, “The estimated premium for a 50 year old will be between $491.00 and $600.00 in Georgia.” Per month.
State mandates do not apply to the federal program. Nor does the premium tax.
Mr. Hufford,
Thanks for the update on the PCIP program.
I’ve added you to my blogroll and will stop regularly to see whats new.
Regards,
Shane Bruce