High-risk pools are a key concept that helped House Republicans pass their replacement for the Affordable Care Act. That bill, the American Health Care Act, which still must pass the Senate to become law, allows states to opt out of the requirement for insurers to cover people with preexisting conditions and set up high-risk pools for these people instead. A late amendment to the bill added $8 billion* in additional funding over five years for these potential pools, and that change garnered enough new Republican votes for AHCA to pass the House. This video explains high-risk pools and shows why they haven’t worked well in the past.
The first video in KHN’s “Sounds Like A Good Idea” series examined selling insurance across state lines. The second dealt with regulating drug prices. Scroll down for the full transcript.
For more information on high-risk pools, check out:
- The Kaiser Family Foundation: High-Risk Pools For Uninsurable Individuals
- healthinsurance.org: Health Insurance And High-Risk Pools
* The $25 billion cited in the video for high-risk pools referred to an earlier GOP replacement proposal. The total amount of money for high-risk pools and other “stability” measures for states to share is $138 billion in the version of AHCA that passed the House.
One of the main goals of the Affordable Care Act was to help people get insurance who couldn’t get it before. Particularly people with pre-existing health issues who buy their own coverage.
Before the health law passed in 2010, insurers could just say no and not sell policies to sick people at any price. Even minor problems could get you turned down.
Now, that’s illegal. And insurers can’t charge sick people more either. The health law also says everybody has to buy insurance – that mandate is supposed to help bring more healthy customers to insurers.
But that piece of the law isn’t working very well right now. Insurers say too many sick people have been buying insurance, and not enough healthy people have been joining them.
That can help cause premiums to rise, and insurers to lose money. Some companies say they are losing too much and have stopped offering coverage in the health exchanges.
One way Republicans say the system could be fixed is by returning to something called a high-risk pool.
The idea is to let all the sick people buy their policies in a separate insurance pool, and then have insurance companies and states and the federal government all chip in to pay for their care and keep their premiums low.
Before the Affordable Care Act, 35 states had high-risk pools.
The federal government had one, too, as a transition to the health law. But none of them worked very well.
The biggest problem? Both premiums and other costs remained too high for many people with health conditions to afford. The federal program ran out of money almost a year before it was scheduled to end.
Sometimes the pools got so expensive for states that they had to impose waiting lists for coverage.
And often, to keep costs down, risk pools set up waiting periods before they started paying bills for the very illness that made people high risk.
Republicans say their new risk pools plan would be better than the old ones. Their plan says it would keep premiums low, and no wait lists would be allowed.
But it’s not clear that the $25 billion in federal funding they propose would be enough, or that states would step in to help fund the pools.
So high risk pools are another idea that sounds good, but that’s very hard to make work in the real world of health care.