NCPA - National Center for Policy Analysis


January 31, 2008

High-risk pools provide health insurance to people with costly medical problems -- often those who can't afford to pay the higher costs insurance companies charge for serious health problems incurred after a health policy is first written, says the Detroit Free Press.

Costs and coverage:

  • The coverage can cost as much as 150 percent more than healthier people pay, according to several insurance industry groups and nonprofit organizations. 
  • For instance, in some states, high-risk pool coverage costs consumers $500 to $1,000 a month in addition to a $1,000 annual deductible.
  • Nationwide, only 190,361 people are insured through high-risk pools. 
  • Minnesota, with the oldest and biggest plan, started in 1976, covers 29,089 people.

Blue Cross -- a nonprofit organization created by state law as an insurer of last resort -- favors creating a high-risk pool as a way to lessen what it says is an unfair burden of providing insurance to all applicants.

"The way it is now, it's unsustainable," said Mark Cook, vice president of government affairs for Blue Cross.  Though the number of people served by the pools may be small (most states have fewer than 10,000 participants in their pools), they are part of a problem demanding changes to level the playing field for Blue Cross, Helen Stojic, Blue Cross spokeswoman.

Funding high-risk pools remains a challenge, says the Free Press.  The pools operate at a loss in virtually all 34 states.  Some states underwrite losses by charging hospitals a bed tax.

Source: Patricia Anstett, "Lawmakers study high-risk pools for health coverage," Detroit Free Press, January 30, 2008.


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