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Slow enrollment for high-risk health insurance pools

health insurance waiting roomIn many states, the new high-risk health insurance pools for patients with pre-existing conditions haven't attracted as many people as expected.

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Most of these pools officially opened in August and September. Only about 8,000 people across the country have enrolled so far, according to the latest statistics from the U.S. Department of Health and Human Services. In 29 states, fewer than 100 people have signed up for this coverage. Pennsylvania and Illinois have the highest enrollment numbers, at 1,657 and 664, respectively.

Health insurance, anyone?

"Enrollment in the federally funded portion of the program has been fairly slow," says Richard Cauchi, health program director at the National Conference of State Legislatures.

Some patients who qualify may be staying out of the high-risk pool (also called a Pre-existing Condition Insurance Plan) because they can't afford it. The individual pays the entire health insurance premium in most states. "These policies cost $5,000 to $8,000 per person" per year, Cauchi estimates.

However, out-of-pocket costs in these plans are capped at $5,950 for an individual. Two states, New Mexico and Maine, provide a premium subsidy.

In addition, some residents who qualify aren’t aware that the program exists, so there's a need to raise awareness, says Jean Hall, project manager with the Commonwealth Fund, a New York-based charitable foundation that researches health care issues. Enrollment "is moving a little bit slower than people expected. I think it's just getting the word out," she adds.

Under the federal health care reform law (the Patient Protection and Affordable Care Act), each state was required to set up a temporary pool by July 1. The goal was to provide affordable health insurance for people who had been uninsured for at least six months because of pre-existing conditions. The law allocated $5 billion to be distributed among states to pay for the health insurance coverage.

Twenty-seven states chose to administer their own program, and 23 states and the District of Columbia opted for federal administration. The program will be terminated in 2014, when insurers will be required to cover pre-existing conditions.

"The Affordable Care Act was designed to ensure that Americans who need health insurance are no longer denied access to the care they need, and that includes the youngest and most vulnerable Americans," stated HHS Secretary Kathleen Sebelius in a media release. "We have been working closely with the states in their role as insurance regulators and with insurance companies to find ways to improve access to coverage for America's families."

States nervous about getting stuck with the health insurance bill

Thirty-five states already had a similar high-risk pool before health care reform was passed, according to the National Conference of State Legislatures. The new pools did not affect people who were already enrolled in existing programs (those patients retained their coverage).

Initially, some states were concerned that federal funds would run out too soon. It was difficult to estimate exactly how many residents would enroll in the high-risk pools. After several months of moderate or low enrollment numbers, this concern has subsided somewhat.

"I have not heard of any locations that ran into any financial shortfalls," Cauchi reports. "Money has not been a factor in how that played out since September."

Hall agrees: "At this point in time, it's not a problem. If enrollment were to grow exponentially, funds could get tight."

Some states put a cap on the number of enrollees or a lifetime maximum on the policy to ensure that expenses wouldn't get out of control.

Unlike the federal government, 48 states have a constitutional requirement to balance their budgets, and they were worried they'd be left holding the bill if the federal government didn't come up with enough money, Cauchi points out.

Good health insurance, no waiting in line

In a June 21 letter, the Congressional Budget Office (CBO) predicted that funds may be exhausted before the end of 2013, but total federal spending would be capped at $5 billion. The CBO estimates that the number of enrollees will average about 200,000 over the next two years. It concludes that the new pools would be more attractive than the high-risk pools that previously existed in some states because premiums would be lower and the new pools would provide immediate coverage.

"There's no waiting period, which is really great," Hall says. "It's pretty good coverage. It's fairly comprehensive."

The new high-risk pools "are a literal life-saver because people have dire, life-threatening conditions" that cost thousands of dollars to treat, Cauchi says.

Looking ahead, Hall is optimistic about the enrollment prospects. "I think [the pools] will slowly fill up. They will reach their capacity," she predicts.

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