Revisit how high-risk insurance pools are working in your state

Joanne Kenen

About Joanne Kenen

Joanne Kenen, (@JoanneKenen) the health editor at Politico, is AHCJ’s topic leader on health reform and curates related material at healthjournalism.org. She welcomes questions and suggestions on health reform resources and tip sheets at joanne@healthjournalism.org.

It’s a good time to take a look at the high-risk pools.

There are two basic kinds of high-risk pools – about 35 states have some form of high-risk pools that predate the Affordable Care Act, and all states have Pre-Existing Condition Insurance Pools created by the federal law.

Let’s look at the “PCIPs” first. (Here’s a federal website that explains them.)

Some states administer these “PCIPs” themselves, and some let the federal government run them. “Red” states tended to hand it to the feds, “blue” states tended to run it themselves but there were enough exceptions in both directions to make this less political than the fight over the state-run health insurance exchanges going online in 2014.  Here’s a map.

These pools were supposed to be temporary — a bridge to get some uninsured people to 2014. They never were going to cover everyone and they never were going to be cheap for these individuals, despite the $5 billion in federal subsidies. Enrollment in states was slow and uneven, but after tweaks by the Department of Health and Human Services to the premium structure and more outreach, it picked up a bit. The pools were meant to provide a degree of help to people with serious and expensive medical conditions who hadn’t been able to get insurance for at least six months.  It was not meant to be a permanent or comprehensive solution. According to HHS, about 100,000 people are covered.

But some of those people were very expensive to cover. By early this year, federal officials suspended enrollment. (In February for the federally administered ones, in early March for the states.) They wanted to make sure that the $5 billion didn’t run out. People who are in the pools will continue to be covered but new people can’t come in. In January, the PCIP pools will close and the people in them can be covered in the regular state exchanges like everyone else.

States were worried, though, that money could run out later this year and they’d be on the hook for some pretty expensive patients. HHS has given them the option of letting the feds administer the program for these final months, and all but 10 of the 27 did. The feds also proposed some regulations to get through these final months.

Meanwhile the House Republicans proposed transferring more money into the high-risk pools – but the GOP leaders had to pull the bill from the floor because it didn’t have enough votes. (That’s unusual – leaders don’t usually face rank and file repudiation of a bill they’ve pushed). There was a lot of politics here. Some Republicans didn’t want to be seen doing anything to “fix” the health law they hate – at least not before getting a chance to vote to repeal the law. They got that chance a few weeks after the mini-rebellion, the first repeal vote since this Congress convened in January.

House leaders say they are going to bring up the bill again (maybe even in the next few days) but that’s not a sure thing. Some Republicans still won’t want to “fix” a piece of the law, and some don’t want to spend federal money on federal high-risk pools, although some would be more comfortable ideologically subsidizing state pools. Democrats aren’t voting for it either. By and large they would be happy to put more money into the pools, but they don’t want to take the money away from the beleaguered Prevention and Public Health Fund, which is where the GOP bill specifies the money would come from. (Even if the GOP bill passes the House now that it’s passed the symbolic repeal vote, the Democratic-led Senate won’t pass the high-risk pool bill in its present form.)

Anyhow – all this means it’s a good time to look at the pools in your state.  Is your state still managing its pool? How? Who enrolled and when? What provisions are being made, if any, to reach out to the people in the PCIP pool and help them sign up for the exchanges next year? Are there lessons learned from the enrollment, outreach and administration of these pools?

On that last point – lessons learned – be careful. The incentives and dynamics of these PCIPS (or the older, state-based versions) aren’t the same as the 2014 exchanges. ALL the patients in the PCIPS, by definition, are uninsurable in the current system. They have serious, expensive diseases and no insurance on the job and the insurers in the individual market don’t want them for perfectly obvious business reasons. On one hand the states (and feds) created programs to help them. On the other hand, they were going to be really expensive for the states —with no healthy people to spread the risk among. (Some of the older pre-ACA state pools had waiting lists or caps).  So if critics of the health law say something like “enrollment was low but the money ran out anyway and therefore the Obamacare exchanges won’t work” – it’s apples and oranges.

With the exchanges, this population won’t be treated differently than healthy people the same age.   They won’t be rejected because of pre-existing conditions and they won’t be facing ultra-high premiums.  They will have strong incentives to get into the new exchanges – very, very strong incentives. The same rates as everyone else, a guaranteed benefit package, limits on out-of-pocket costs and possibly subsidies depending on their income level.

The challenge with the exchanges will be getting everyone else in – the younger, healthier population needed to spread the risk among the sick and the well and make the exchanges work.

Tomorrow we’ll look at the state pools.

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