How does health reform law affect existing state-run high risk plans?

[FinanceGeek]

The new "heathcare reform act" is going to significantly improve the availability of medical insurance for those with pre-existing medical conditions. However, the only provision that directly addresses this in the near term (before 2014) is the creation of a Federally run temporary high risk pool. Unfortunately, the statute says that eligibility for this new pool requires that one not only have a pre-existing condition, but also one must have been uninsured for at least the last 6 months.

This is quite the opposite of one of the key aspects of the HIPAA protections that exist already. HIPAA allows one to avoid most pre-existing condition limitations altogether by having prior "creditable coverage", whereas the new high risk pool will turn away people with current or recent coverage.

How will this new Federal high risk pool relate to the 30 or so existing state level high risk plans? Will the existing state level plans (mandated by HIPAA I believe) continue to exist? Will HHS simply give funding to the states that are already running these plans to satisfy a portion of the new law, perhaps empowering/coercing them to expand their plans beyond their state's borders? Given the rush to get all this running within 90 days (e.g. end of June), one would think it might be expedient to make it happen that way.

And will those existing state level plans become subject to the new rules that other health insurers are? For example, no lifetime limits, no "restrictive annual limits on coverage", limitations on premium differentials by age, etc? If so, that would appear to remove a couple of the major drawbacks in the existing state run high risk pools.

Many of the state level plans are useful to those considering ER, since they don't require that one be without insurance before applying. In a few of the states, the acceptance criteria is somewhat looser than the strict HIPAA eligibility guidelines. The big problems with most of the state plans now are: some are closed to new applicants, many have fairly low lifetime or annual coverage limits, and many have huge premium markups for those of near-retirement age.

It seems likely that for those who are currently insured but have pre-existing conditions, the healthcare reform law could make the state level plans far more attractive than they are today. And certainly where they exist in a given state, they seem more attractive than the soon to be created Federal plan.

 

[tvmovie]

Health Care reform - State high-risk pools

I'm still trying to figure out how those people who have been "declined" for Individual health insurance coverage due to pre-existing conditions and have opted for a state-run high-risk pool will be affected? The reference I see in the new law says one must uninsured for 6 months to qualify for the national high-risk plan. Would they have us drop our state high risk pool insurance for 6 months in order to qualify for the national pool? That appears to be high-risk in and of itself.

If we stay in the state-run pool (at exorbitant premium rates and deductibles), will the national funds be absorbed into the state-run pool - thereby lowering rates and deductibles?
Will we need to stay in the high rate state pool for 6 months before getting a chance at the national pool?

Any ideas?

 

[REWahoo]

Any ideas?

I think the answer is "To be determined." DW is in the state pool and we don't have a clue what will happen.

 

[FinanceGeek]

I may have found some info - pages 8 and 9 talk about the likely effects of HR 3590 on state high risk pools. What was actually passed is not exactly HR 3590 ... but its a data point ...

The document says "The standards established under the bill would supersede any state law or regulation (except for state licensing laws and state laws related to plan solvency)", which could mean that once this is established, you'd only be eligible to enroll in the state run high risk pools if you were without insurance for 6 months.

http://www.kff.org/uninsured/upload/8041.pdf

 

[ziggy29]

I could be wrong, but it seems to me that the eventual elimination of medical underwriting would effectively kill the "risk pool" concept. In the interim, it's clear as mud. But what do I know?

 

[FinanceGeek]

...it seems to me that the eventual elimination of medical underwriting would effectively kill the "risk pool" concept

Yes, that's a cornerstone intent of the new law.

In the interim, it's clear as mud

Between roughly the end of June and Jan 1, 2014 it seems that existing state high risk pools will get better in one sense - new mandates that do away with lifetime and annual limits and limit price differentials among age groups.

But, it also seems likely that the "6 months without insurance" eligibility rule will now apply. This is way different than the prior HIPAA criteria under which these plans are established. And keep in mind many of these state plans are far less restrictive than HIPAA today - some permit anybody who wishes to join and has a qualifying diagnosis to do so. In which case these plans are about to become far less accessible to many people now working but attempting to ER. Revised date for early retirement for those in "pre-existing condition insurance job lock" may now be 1/1/2014 - COBRA period, or roughly mid 2012 assuming the typical 18 month COBRA eligibility.

Will access to insurance for those pre-existing conditions actually get worse before it gets better? Guess we'll find out shortly.

 

[ziggy29]

Revised date for early retirement for those in "pre-existing condition insurance job lock" may now be 1/1/2014 - COBRA period, or roughly mid 2012 for most.

It'll be interesting to see how many people do retire then, and if there's even a downward blip in the official unemployment rate.

This new law is going to be very expensive, but one upside is that it can free up some jobs as those who are only working for the health insurance can finally get off the hamster wheel with a little more confidence and certainty. So there might be at least a little bit of offset from reduced unemployment benefit payouts.

 

[FinanceGeek]

The msm is finally picking up on the issues of merging the Federal pre-existing plan with the existing state run plans.

Not stated in their article is my feeling that some people might choose to go bare for 6 months in order to qualify for the new and better plans.

For Pre-existing Conditions, Separate and Unequal Coverage? - Prescriptions Blog - NYTimes.com

The problem is that the new pools will be open only to people who have been uninsured for at least six months. Patients enrolled in the current state pools therefore would probably not qualify. The possible upshot: separate but unequal pools, and groups of sick people who feel they’ve been seriously slighted.

Also

http://prescriptions.blogs.nytimes.com/2010/04/13/will-there-be-annual-caps-in-the-high-risk-pools/

 

[tvmovie]

Thanks for your information. I've been googling daily to find some answers, but not seeing the blogs. I keep asking the question of K.Sibelius (email, twitter, etc) but, so far, no info is forthcoming. It appears that those of us who "bit the bullet" and entered the state-run high risk pool will be confined to one end of the pool, with its high premiums and deductibles. Those, however, with pre-existing conditions who did not (whether they could-not or would-not) enter the state run pool, will benefit swimingly in the national pool with lower premiums and reasonable deductibles. My hope is that these issues will be addressed soon.

 

[huusom]

The msm is finally picking up on the issues of merging the Federal pre-existing plan with the existing state run plans.

Not stated in their article is my feeling that some people might choose to go bare for 6 months in order to qualify for the new and better plans.

For Pre-existing Conditions, Separate and Unequal Coverage? - Prescriptions Blog - NYTimes.com

Also

Will There Be Annual Caps in the High-Risk Pools? - Prescriptions Blog - NYTimes.com

This is great info. However, the new risk pool only address out of pocket expenses and life time limits but they do not address the sky rocketing cost of insurance premiums. I wander how do people with limited incomes can afford to pay for it.

 

[chinaco]

This is great info. However, the new risk pool only address out of pocket expenses and life time limits but they do not address the sky rocketing cost of insurance premiums. I wander how do people with limited incomes can afford to pay for it.

Research the bill that signed into law. For lower income people, there is a credit that essentially creates a sliding scale for premiums.