High-Risk Pool Accepting Applications
For the 21 states who opted out of administering the Affordable Care Act’s new temporary high-risk pool program, the U.S. Dept. of Health and Human Services is now accepting applications for coverage through its national Pre-Existing Condition Insurance Plan (PCIP). Eligible applicants—viz., U.S. citizens who have been uninsured for at least 6 months and have been unable to get coverage due to a pre-existing condition—could get coverage as early as August 1.
HHS is supposed to announce final premium rates for PCIP coverage on July 15, but the new PCIP website already provides estimated rates for each state whose plan will be federally administered. Here in Georgia, for example, the monthly premium for a 50-year-old applicant should be between $491 and $600.
We don’t know how many people will apply. Austin Frakt, based on his prior research, suggests a million may be eligible. But according to CBO estimates, the $5 billion Congress has allocated will only subsidize coverage for 200,000 people. Otherwise, the funds will dry up before the program terminates (on January 1, 2014, when the new state-run health insurance exchanges must be up and running).
High-risk pools are not an ideal policy solution for covering people with “uninsurable” pre-existing conditions. A more desirable approach would be to integrate high risks and low risks into the same pool—diversified risk is what pooling is all about. And that’s partly what the exchanges are designed to do, when they come online in 2014. The temporary high-risk pools are only meant to bridge the gap between now and then. They are a lifeline to people with extraordinary needs that are ill-served by the individual insurance market as it operates today. That transitional goal is not yet seriously in jeopardy, but we may need to revisit funding for the program in the next two years to ensure that we achieve it.
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