Enrollment is lower and costs are higher than expected for a temporary high-risk health insurance plan established by the Affordable Care Act, according to a new Commonwealth Fund report.
Launched in July 2010, the Pre-Existing Condition Insurance Plan provides coverage for people with health conditions who would have trouble qualifying for affordable health insurance. The plan will operate until 2014 when the federal health care reform law will prohibit insurers from denying coverage or charging higher premiums for people with health conditions.
The Pre-Existing Condition Insurance Plan is serving its purpose, the report said, but the high costs and relatively low enrollment show that such high-risk health insurance pools are not the way to expand coverage for the long term.
"High-risk pools work as a stop-gap measure, but they are expensive to run, often unaffordable for those who need them, and not a viable long-term solution to the problem of high rates of uninsured Americans," Jean Hall, associate research professor at the University of Kansas and lead author of report, said in a press statement.
About 78,000 are enrolled in the plan, fewer than officials projected. By law, the plan can't impose a waiting period, and it's open to anyone who has been uninsured for at least six months and has a health condition. Premiums can't be any higher than those charged by private health insurers for a healthy person in the same age range. Still, many who are uninsured can't afford the premiums, so enrollment is limited to mostly higher-income people, the report said.
Medical costs are higher per person for the Pre-Existing Condition Insurance Plan than for other high-risk health insurance plans operated by states, researchers found. State-based high-risk pools often have waiting periods and premiums that are higher than what healthy people would pay in the local individual health insurance market.
"Given the general lack of affordability of high-risk pool coverage at the individual level and the high costs of plan operation, the potential of high-risk pools as a vehicle for coverage expansion remains quite limited," the researchers wrote. "In short, the only way to make insurance affordable for everyone is to make sure that everyone has insurance."