State insurance officials say funding shortfalls for a new federal-state program that expands coverage to the uninsured and chronically ill could result in some qualified enrollees being turned away.
Small safety net
High-risk insurance program may prove too popular
Created under the 4-month-old reform law and funded by $5 billion in new money, the Pre-existing Conditions Insurance Plan—a type of high-risk pool administered either at the state or federal level—could prove more popular than White House officials first thought.
The result could lead to a cap on enrollment, leaving the sick and uninsured to continue on state or federal aid programs.
“I don’t think there was any illusion, at any moment in time, that the money was going to be enough to take care of everyone,” said Kim Holland, the insurance commissioner for Oklahoma and the secretary-treasurer for the National Association of Insurance Commissioners.
The program, which officially launched July 1, allows states to offer coverage to those who otherwise have been turned away or priced out by private insurance companies because of a pre-existing condition.
To qualify, individuals must be uninsured for at least six months and unable to get coverage because of a health condition such as diabetes or cancer. All states must participate in the high-risk pool, though HHS will administer dozens of plans itself.
So far, 21 states have elected to have the federal health agency run the plans. Coverage includes a wide range of benefits, including primary and specialty care, hospital care and prescription drugs.
But a long history of coverage denials or overpriced plans by private insurance companies has created a backlog of potential candidates. In Oklahoma, Holland said, the number of uninsured has reached 500,000, but the program there will likely top out at 1,900 enrollees. Other insurance commissioners say they face similar caps.
On a conference call with reporters last week, HHS officials said they estimate that around 200,000 people will be enrolled in the program before 2014, with premium costs running anywhere from $140 per month on the low end to $900 on the higher side.
The Congressional Budget Office, however, has warned that any enrollment higher than 200,000 would result in draining the program’s $5 billion funding. Holland said the CBO finding has fueled concerns that state commissioners will have to turn people away or cut off benefits as the program unfolds and stretches to 2014, when a new open market for insurance companies, called an exchange, goes into effect.
Jay Angoff, director of HHS’ Office of Consumer Information and Insurance Oversight, said the federal dollars earmarked for the program would be divvied up by states in a way that depends on their situation. “Some states will see significantly higher enrollments,” he said, adding that others—those with existing guaranteed issue plans—may see lower enrollment. HHS has the authority to reallocate the money, much like it does in the federal-state Children’s Health Insurance Program. “We’re going to do our best to make sure it insures as many people as possible,” Angoff added.
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