NCPA - National Center for Policy Analysis


May 5, 2010

Eighteen states have said they will not administer a stopgap program to provide insurance coverage to people whose preexisting health conditions have left them uninsured, forcing the federal government to do the work, says the Washington Post. 

At issue is a provision to extend temporary relief to people with preexisting medical conditions beginning this year, instead of making them wait until 2014, when insurers will be prohibited from turning people away or charging higher premiums based on health status. 

U.S. Dept. of Health and Human Services (HHS) Secretary Kathleen Sebelius told state officials last month that she wanted to build on state programs, and she asked state governments to let her know by April 30 whether they would run the pools at the state level: 

  • The health care law says that the high-risk pools are meant to give people with preexisting conditions "immediate access to insurance," and it requires that they be established within 90 days of the law's March enactment.
  • To qualify, individuals must have been uninsured for six months; the premiums are supposed to match those for a "standard population."
  • Out-of-pocket expenses will be capped -- in the case of individuals, at $5,950.  

According to HHS, Alabama, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Louisiana, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia and Wyoming declined to administer risk pools.  Most of those states are led by Republican governors.  Three of them -- Delaware, Tennessee and Wyoming -- are led by Democratic governors.  Florida's governor was elected as a Republican but is now running for a Senate seat as an independent. 

HHS has been exploring the possibility of hiring nonprofit insurance companies to operate the pools.  Most states already have high-risk pools, but they can be prohibitively expensive and they generally do not meet the new federal requirements, says the Post. 

The chief actuary at the Centers for Medicare and Medicaid Services has predicted that the $5 billion allotted for the new program will run out as early as next year. 

Source: David S. Hilzenrath, "18 states refuse to run insurance pools for those with preexisting conditions," Washington Post, May 4, 2010. 

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