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Opinion Column

A Defense Of High-Risk Insurance Pools — From One Critic To The Others

From the beginning, I’ve been a persistent, occasionally grouchy critic of the high-risk insurance pools set up in the new federal health law. The title of my recent commentary in the Journal of General Internal Medicine, “Too Little And Thus Too Late,” summarized my general view. I’m not retracting any of these tough assessments. Yet I’m not alone in noticing the ironic partisan tinge to the criticisms now being leveled at this program.

The Obama administration, having unwisely acquiesced in the back-loading of spending in its effort to overhaul the health system, had pressing political and human reasons to support the Preexisting Condition Insurance Plan. This network of state-federal high-risk pools is a stopgap measure, which will serve a total of perhaps 375,000 people before health insurance exchanges and the other main pillars of the health law become operative. The money made available for the program — $5 billion over about four years — was not close to what is required to help more than a small minority of the medically uninsured. Many sick people can’t afford the accompanying premiums, which, though subsidized, still often cost several hundred dollars a month. All this was pretty obvious from the start.

The Washington Post’s Amy Goldstein recently published a widely noted piece describing the administrative challenges facing the new program. It’s costing a lot of money. Moreover, and perhaps counter-intuitively, fewer people have signed up in many places than was originally expected. Republicans are attacking the program — rather hypocritically — since their criticisms apply with greater force to their own health reform proposals.

Conservative health policy expert John Goodman presents one of the toughest critiques. Noting the high-risk pools’ low initial enrollment, he concludes:

“We now know how many people have the problem most often cited as the reason for last year’s health overhaul legislation. Answer: 8,000.

No, that’s not a misprint. Out of 310 million Americans, only 8,000 people have the problem given as the principal reason for spending almost $1 trillion, creating more than 150 regulatory agencies and causing perhaps 150 million or more people to change the coverage they now have.”

Leaving aside that “150 million or more” number, I’m puzzled that Goodman would take low initial enrollment as a sign that problems of the medically uninsured were “hyped and exaggerated from the get go.”

My own work and the work of others documents that a significant number of Americans face the dual challenge of uninsurance and serious illness. For example, data from the 2005-2006 National Health and Nutrition Examination Survey (the most recent complete data available when this research was done) indicate that 440,000 uninsured Americans have been diagnosed with strokes. Almost 1.3 million have a history of cancer. More than 500,000 were diagnosed with congestive heart failure. In many cases, such conditions pose obvious obstacles to obtaining affordable health insurance coverage.

Several million other Americans who successfully obtain health coverage through the individual and small-group markets report they experience higher premiums, coverage denials and personal economic hardship related to their own or a loved-one’s pre-existing condition. Then there are the hundreds of thousands of Americans deemed sufficiently ill or injured to qualify for federal disability benefits, yet who are currently uninsured during the two-year waiting period for Medicare coverage.

Across a diverse population of Americans facing serious illness or disability, many hundreds of thousands of people are waiting for 2014, when they will become eligible for subsidies and regulatory protections through health insurance exchanges or Medicaid. The health law’s preexisting condition insurance plans are simply too limited, too new and too complex to address these huge economic, medical and administrative challenges.

And yet I can’t help thinking that the initiative is taking some unfair political hits. In evaluating its trajectory thus far, it’s important to note that the program faces inherent administrative challenges. On a short time-frame, HHS needed to initiate complicated partnerships with insurance providers and regulators in 50 states in an environment of fiscal crisis, political acrimony and uncertainty.

The medically uninsured are an inherently varied and complicated group. You may find it perverse that these high-risk pools are under-subscribed in many places, given that their funds can only cover a small fraction of the underlying needy group. Yet this, too, is not hugely surprising. Precisely because resources are so constrained, states and the federal government face difficult challenges tuning outreach, eligibility criteria and premiums to make this thing work. Does one focus on a small number of high-cost hospital ICU patients? Does one focus on the cheapest people to attain the largest feasible enrollment? Does one focus on patients at the most financially-stressed providers? Does one hold back a bit on the initial outreach given uncertain expenditures and budgets? Each of these choices is reasonable. Each has its own implications for enrollment and cost.

The program’s stopgap nature poses another challenge, as governors must commit to a complicated new program that will sunset within a few years.

The Department of Health and Human Services has hired some of the best insurance administrators and policy wonks in the business to implement this. There are bound to be growing pains and glitches. The same was true of Medicare Part D. The same will be true of health insurance exchanges, which will face many unexpected challenges and occasional embarrassing snafus. We must show a little patience as some very talented and embattled people work these things through.

This is small consolation to desperately ill people who need help. Yet if we want to get angry, we should be angry at the process last year that produced only $5 billion when maybe five times that amount was really needed. And as Republicans try to defund this or other aspects of health reform, we should understand what such funding constraints can do to the quality and to the humanity of American government.