Most states have high-risk health insurance pools
24 03 08 - 13:30
At least 34 other states have high-risk health insurance pools similar to the one being debated by the Senate Health Policy Committee. The pool concept is supported by Blue Cross Blue Shield of Michigan and contested by a number of competing health insurers and consumer groups.
In 29 states, the high-risk pools - designed to cover individuals with medical conditions that essentially make them otherwise uninsurable - are subsidized by a financial assessment on all insurance carriers in the individual health market. The other five states, including Tennessee, are funded by a combination of federal, state and other assessments.
The 34 states include Illinois, Wisconsin, Kentucky, Minnesota and Iowa. Ohio and Pennsylvania do not have high-risk pools. Florida's high-risk pool is closed because of lack of funding.
In a 2002 report on high-risk pools, the journal Health Affairs offered these cautions: "In most states, the high-risk pool mirrors the individual market's problems: Coverage is expensive, the waiting period for coverage of pre-existing conditions is long, and benefits may be limited."
A review of the pools by Crain's indicates that about half are operated by Blues plans and the rest administered by states or quasi-state agencies. One of the contested aspects of Michigan's proposed high-risk pool is that Blue Cross would administer it.
However, the Blues would pay the pool's administrative costs, which has been estimated at 10 percent of claims. In addition, the Blues would pay all costs with the pool for the first two years. Assessments would be imposed on competing health insurers based on market share if claims exceeded 105 percent of premiums.
"No high-risk pool charges standard market rates," said the Health Affairs report. "All charge a higher premium - typically 125 to 200 percent of the average standard rate for comparable coverage - and also vary the premium for age and other factors."
A Blue Cross spokesperson said the combination of the Blues providing health insurance to people at the lowest cost and the high-risk pool, which the Blues also call the Guaranteed Access Plan, would give Michigan one of the nation’s best safety nets.
"The rest of the (pools) are more proportionately spread out in the financial cost structure if they involve insurer assessment than the proposed Michigan model (so insurers in those plans more equally share burden)," Helen Stojic, a Blues' spokesperson, said in a statement. "The Michigan House bill calls for BCBSM to assume the lion's share of costs for GAP among the insurers involved. So that is one way that Michigan's model is unique."