Page 5 - HFA Dateline 2017 Q1 Spring

High Risk Pools: A Cautionary Look Back

By Katie Verb, JD

s of this writing, there is a lot of talk about repealing of the individuals who applied for coverage. Thirty-three states
Aand replacing the Affordable Care Act, but there is little imposed lifetime caps and those with bleeding disorders who
certainty about what replacement legislation will actually look reached their cap were often forced onto state Medicaid.
like. One element of many replacement proposals is the re- Some pools also implemented tight restrictions on the scope
implementation of high risk pools. High risk pools are plans of coverage—including pre-existing condition exclusions, the
for covering people with pre-existing conditions who have very thing they were designed to remedy. While high risk pools
been locked out of individual market plans because of those could offer a safety net for those who could not obtain cover-
conditions. These plans were used in 35 states prior to the age elsewhere, enrollment in these pools was notoriously low
implementation of the Affordable Care Act, and the bleeding across the nation because of the high premiums.
disorders community, unfortunately, had long had experience
with their shortcomings. Despite this history, recent ACA replacement proposals would
re-establish high risk pools for individuals with pre-existing
You might recall, in the pre-ACA era, that insurance companies conditions who can’t get or maintain private coverage. Our
could deny or delay coverage, and/or charge unaffordable high concern with these replacement plans is that they repeat
premiums, to individuals who had “pre-existing health condi- the pattern of underfunding these high risk pools. Analysts’
tions.” Serious and expensive chronic conditions like hemo- estimates vary, stating that between 15 million and 130 mil-
philia all too often barred people from buying insurance on the lion Americans with pre-existing conditions who could face
individual market in most states. High risk pools were one of difficulty buying private health insurance. The cost of fund-
the few options available to people closed out from the private ing coverage for this population through high risk pools could
insurance market.
reach, by one estimate, $178 billion per year, yet two of the plans
These pools, though, generally offered limited coverage, with put forth would only provide short-term funding of between
high deductibles and low annual and lifetime coverage caps. $3-25 billion.
Premiums could be prohibitively expensive (often 200% or High risk pools, according to a former California administra-
more of the prevailing rate in the individual market) and many tor, were always intended as a stop-gap measure: “we were a
states were unable to make up the resulting shortfall in fund- holding place, a waiting area… We were always hoping [they]
ing when premiums and deductibles didn’t cover costs of care would go away with the advent of national insurance reform.”
for the high-need enrollees. Because so many high risk pools High risk pools, when underfunded, are not an affordable sub-
were chronically underfunded, they implemented enrollment stitute for meaningful insurance coverage and protection from
caps and waiting lists that excluded many (sometimes most)
the costs of pre-existing conditions. n n
“ High risk pools, when underfunded, are not an affordable substitute for meaningful

insurance coverage and protection from the costs of pre-existing conditions. ”

Karen Pollitz, HIGH-RISK POOLS FOR UNINSURABLE INDIVIDUALS. KAISER FAMILY HEALTH NEWS (2016), http://kff.org/health-reform/issue-brief/high-risk-pools-
for-uninsurable-individuals/ (last visited Jan 31, 2017).
Tanya Schwartz, State High-Risk Pools: An Overview, KAISER COMMISSION ON MEDICAID AND THE UNINSURED, KAISER FAMILY HEALTH NEWS (2010), HTTPS://
KAISERFAMILYFOUNDATION.FILES.WORDPRESS.COM/2013/01/8041.PDF (last visited Jan 31 2017)
Jean P Hall, Why a National High-Risk Insurance Pool Is Not a Workable Alternative to the Marketplace, 31 THE COMMONWEALTH FUND (2014), http://www.common-
wealthfund.org/~/media/files/publications/issue-brief/2014/dec/1792_hall_highrisk_pools.pdf?la=en (last visited Jan 31, 2017).
Harold Pollack & Timothy S. Jost, Seven Questions About Health Reform, THE NEW YORK TIMES, January 10, 2017, https://www.nytimes.com/2017/01/10/opinion/seven-
questions-about-health-reform.html?_r=2 (last visited Jan 31, 2017)
Pauline Bartolone, The Trouble With Replacing Obamacare With High-Risk Health Pools, TIME, 2016, http://time.com/money/4579210/high-risk-health-pools-replace-obam
acare/?xid=homepage&niReferrerLink=homepageFeed (last visited Jan 31, 2017).

Spring 2017 | Dateline Federation 5