State-Sponsored High-Risk Insurance Pools Have ‘Limited Impact’ on ‘Uninsurable,’ Study Finds
The high-risk health insurance pools that 29 states operate for uninsurable individuals are largely ineffective because of the high cost of premiums, "limited benefit packages," long waiting periods and a lack of publicity, according to a new report from the Commonwealth Fund. Researchers at Mathematica Policy Research Inc. analyzed data from the high-risk plans, which insure about 110,000 people who "have either been denied coverage" by private health plans because of pre-existing medical conditions, are eligible under the 1996 Health Insurance Portability and Accountability Act, or are "Medicare beneificiaries in need of supplemental insurance" (Commonwealth Fund release, 8/10). The report found that:
- State high-risk pools insure an average of 1.2% of all Americans covered by individual insurance, and less than 2% in all but three states -- Minnesota, Nebraska and Oregon.
- The average high-risk pool premium is $3,083. Most premiums are "high relative to incomes, and typically include sizeable deductibles [peaking at $10,000 in Alaska, Arkansas and Florida] and co-payments." In addition, many states have caps on lifetime and annual benefits.
- Colorado, Connecticut, New Mexico, Oregon, Tennessee and Wisconsin are the only states to "operate income-related subsidy programs for premiums or cost-sharing requirements for eligible low-income residents."
- Waiting periods to obtain care for a pre-existing condition after coverage begins are typically six months," but reach 12 months in eight states. Furthermore, states "often impose pre-existing condition exclusions to reduce adverse selection," and most do not advertise their high-risk programs.
- Most high-risk pools limit coverage for maternity care and mental health services.
- All of the pools "operate at a loss," meaning that states "must draw additional revenues for financial support" -- these funds are "often inadequate to meet the demands for pools and do not increase with the growth in health care costs" (Achman/Chollet, "Insuring the Uninsurable: An Overview of State High-Risk Health Insurance Pools," August 2001).
