Health Insurance | Will The High-risk Health Insurance Risk Pools Need More Money?
Proponents of reform promote their belief that it will increase Americans’ access to affordable health insurance. Specifically, those with pre-existing conditions will be relieved of the struggle to find a plan that will accept them without charging a significant percentage of their monthly income.
The eventual solution is going to be highly-regulated health insurance exchange markets, which will include subsidies for many buyers. At the same time, individual and corporate mandates are intended to expand the pool of healthy policyholders, thereby making the average cost of claims cheaper.
However, these measures will not be fully implemented until 2014. The high-risk health insurance pools, which begin opening on July 1st, are meant to be a stopgap measure. Some states already have similar pools for their residents, but they are often full to capacity, not to mention almost impossibly expensive for some of those who need insurance the most.
The Obama administration’s healthcare reform law sets aside $5 billion to run the pools (both nation- and state-wide). Experts believe that the amount is probably not enough: it is predicted to cover just 200,000 of the up to seven million eligible Americans with pre-existing conditions who are currently unable to find a health plan on the individual market.
Largely due to this, 20 states have foregone the responsibility of setting up new high-risk pools (albeit ones that would be federally funded). Instead, their residents will be referred to the national pool run from Washington, D.C.
The gap in funding has the potential to cause more problems, especially if states are forced to make up for the shortfall in future years. It may force states to decrease benefits, increase premiums, or cap enrollment numbers. Ironically, residents would be left in the same predicament they are in with the current programs.
Although there have been some partisan objections to using funds to establish often duplicate high-risk health insurance plan pools, the study that exposed these numbers is from an unbiased organization. The Center for Studying Health System Change is highly respected. Granted, the study was also largely underwritten by a group of automakers’ unions: the National Institute for Healthcare Reform; although judging from union support of the Democratic agenda and the scaling back of the “Cadillac” tax on high-cost plans, they would be more likely to judge reform favorably, if anything.
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