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High-risk insurance pools open this summer

By Jay MacDonald ·
Saturday, July 3, 2010
Posted: 9 am ET

The new $5 billion Pre-Existing Condition Health Insurance program, the Holy Grail of health reform for those previously denied health coverage because of pre-existing medical conditions, will begin rolling out nationwide this month, both in states with existing high-risk pools and those without. But premium costs and funding have some questioning whether the high-risk health insurance plan will result in more confusion than coverage.

Is high risk health insurance a good idea?

Is high risk health insurance a good idea?

The program will establish high-risk insurance pools to cover some 200,000 to 400,000 previously uninsurable Americans. It is envisioned as a temporary bridge to 2014, when core provisions of the Affordable Care Act will require insurance exchanges to accept all applicants. As a centerpiece of President Obama's health care reform, the program also has become a bellwether issue for Democrats in the upcoming midterm elections.

According to The New York Times, 35 states already have high-risk pools financed by premiums, assessments on insurers and states funding that cover an estimated 200,000. Of those, 30 states have opted to run their own pools with federal money from the program. Others, including Alabama, Minnesota and Texas, will not accept program money but will instead allow the U.S. Department of Health and Human Services to administer high-risk pools within their borders.

Among the states currently without high-risk pools, some -- including New York, Massachusetts, Michigan and Pennsylvania -- will create and administer their own with federal dollars, while others -- including Arizona, Georgia and Nevada -- will allow the feds to run the new pools.

Consumers can learn more about Pre-existing Condition Health Insurance in their state on the new government website,

Richard Popper, deputy director of the new federal Office of Consumer Information and Insurance Oversight, told the Times that applications for new high-risk coverage will be available to the public in many states this week, with coverage to begin as early as Aug. 1.

The program comes as very good news for individuals who have been denied coverage due to a medical condition -- if they can afford the premiums, that is. estimates that premiums, which will vary widely by state, could average $300 to $600 per month for a high-risk 50-year-old male.

The Congressional Budget Office has repeatedly stated that the administration underestimated the scale of the need. The CBO maintains the program would need an additional $5 billion to $10 billion to meet the health insurance needs of some 700,000 high-risk Americans. The CBO also says the program as currently funded would likely run out of money before 2013 with only 200,000 insured.

In addition, there has been much debate over how the fed-run programs will ultimately mesh with existing state-run high-risk pools.

What’s your diagnosis? Is the $5 billion high-risk program a much-needed lifeline for uninsurable Americans? A flawed stopgap designed to win votes in the midterm elections? An underfunded program in need of a checkup itself? Or all or none of the above?

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