State-based high-risk health insurance pools are among the first programs to be implemented under health reform, Health and Human Service department officials announced in early April.
These state-based pools, designed to provide coverage to uninsured adults with preexisting conditions, are scheduled to be up and running within 90 days and will operate until Jan. 1, 2014. At that time, the new state-based health insurance exchanges would open and coverage would be available to all individuals regardless of preexisting conditions.
“When it's up and running, the new high-risk pool program provides immediate relief to potentially millions of Americans with preexisting conditions like diabetes or high blood pressure who have been shut out of the insurance system,” HHS Secretary Kathleen Sebelius said during a news conference.
The same day, Ms. Sebelius sent a letter to governors and state insurance commissioners asking how they plan to participate in the temporary high-risk pool program. Under the law, HHS has $5 billion in federal funds to set up pools on its own or collaborate with states. HHS asked states to respond with their plans by the end of April.
States that don't currently operate a high-risk insurance pool could establish one with federal help. Those with a pool in place could set up a companion high-risk pool that meets the new federal standards. States also could contract with an insurer to provide subsidized coverage for eligible residents. In states that choose to do nothing, HHS will operate the program on their behalf.
More than 30 states currently have high-risk insurance pools, according to HHS, with premiums 25%–100% higher than standard rates. Under the health reform law, the federal government would require new high-risk pools to set premiums at a standard rate, which would vary by state. The standard rate should be equivalent to what a typical person shopping on the individual market would be offered, according to HHS.
To qualify for the high-risk pools, individuals must be citizens of the United States or lawfully present here, have been uninsured for the previous 6 months, and have a preexisting condition.