Rebecca Vesely: Hello, this is Rebecca Vesely, reporter with Modern Healthcare magazine. We're here with Mark Merlis, independent health policy analyst and the author of a new report on high-risk pools. Hi, Mark.
Mark Merlis: Hi, how are you?
Rebecca Vesely: Good, how are you?
Mark Merlis: Great.
Rebecca Vesely: So can you please describe these new temporary high-risk pools, and tell us a little about who is eligible.
Mark Merlis: OK. As you know, most of the major reforms in the health reform bill don't kick in until 2014. Starting in that year, insurers won't be able to turn people down because of health problems and won't be able to charge people higher rates because of health problems. But until those rules kick in, and people are still going to have trouble finding coverage in the individual market if they have a bad medical history. So the purpose of these pools is to bridge the gap until those broader reforms kick in. What they'll do is sell—subsidize—health insurance coverage to people with high-cost medical conditions. To be eligible you have to have been uninsured for at least six months and you have to either actually have been turned down by a health insurer, or you have to have a specific condition on the list that the secretary of HHS is going to develop. There's going to be one of these pools in each state. Some states will be operating their own pool with federal money. Other states have elected not to do that and instead HHS will run the pools directly.
Rebecca Vesely: And the goal is to get these high-risk pools up and running as early as July, correct?
Mark Merlis: That's correct. I don't see how that's going to happen because the states are just getting their proposals in. In theory, some states will have approval by July 1, but I would suspect it's going to take longer than that to have them actually operational.
Rebecca Vesely: OK. Now in your report for the National Institute for Health Care Reform, you concluded that the $5 billion that the HHS has allocated for the program won't be sufficient. Why is that?
Mark Merlis: Well, I gave a very crude, ballpark estimate that there might be 5 to 7 million uninsured people in this country who have an expensive medical condition.
Rebecca Vesely: Who could qualify for the program.
Mark Merlis: Who could qualify for the program. I think that given the amount of subsidy that the program is going to provide for people's premiums, that the most that could be served per year is about 200,000. Now obviously 5 million people aren't going to line up to join this program, but I think it's going to be a lot more than 200,000. And they're going to have to wind up tightening the rules somehow or turning people away.
Rebecca Vesely: So what can be done to make sure that the people that this provision was meant to help actually get the help? Two hundred thousand people doesn't seem like a lot.
Mark Merlis: There's a lot of tinkering that can be done with the rules, but I think two key things that ought to be considered—and both of which, I think, would require congressional action. One would be to provide a less generous benefit than the program calls for. The law calls for a fairly generous plan, and it might be more effective to provide catastrophic coverage for people, leaving them with some personal financial exposure, but not losing their houses. The other thing that might be worth thinking about is [unclear 3:20] the program. What's going to happen is there's going to be a pretty large, flat premium subsidy that's going to be provided to every participant. It's not going to be enough to bring the premiums down to where low-income people can afford it. And on the other hand it's going to provide a lot of assistance to people who couldn't afford to pay the whole cost themselves. So I think that's worth looking at.
Rebecca Vesely: Do you have any sense of how this could reduce uncompensated care to providers?
Mark Merlis: I would think obviously it's going to do some. I don't think—you know there's $5 billion for the program—I don't think it's going to reduce uncompensated by $5 billion because I suspect that the people most likely to sign up for the program are going to be fairly well-off—at least well-off enough to afford the premiums. And those are people who could have made some contributions to the cost of their own care. So I think it's probably going to leave out a lot of low-income people who are still going to be [unclear: 4:22 ??sort of basically??] as bad debt.
Rebecca Vesely: OK, well thank you so much for taking the time to explain the program to us.
Mark Merlis: Sure. You're welcome.
Rebecca Vesely: This is Rebecca Vesely with Modern Healthcare.
