The Lowdown on High-Risk Pools

A harbinger of things to come?

It was good to see Amy Goldstein’s fine piece on high-risk insurance pools in The Washington Post. It’s an example of the kind of reporting that has been far too lacking in the coverage of health reform—a welcome departure from the cheerleading kind of stuff we saw most of last year. Goldstein gave us a substantial rundown on what’s happening with those so-called “Pre-Existing Condition Insurance Plans” that were part of the Obama administration’s early roll-out of benefits designed to soften up the public before the hard-to-swallow provisions like the individual mandate take effect in 2014. Think of them as sort of a down payment to Americans who need coverage but are too ill to qualify for it in the private market.

Goldstein’s piece documents what many experts were saying during the debate, and what some have known all along. High-risk pools are no way to take care of the uninsured. Most states have offered them for years, and because the premiums are too high and coverage too limited, they’ve never caught on as a source of meaningful help. It looks like the new and supposedly improved versions are not helpful, either.

Goldstein reports that, last spring, Medicare’s chief actuary estimated that 375,000 people would sign up for the pool plans by the end of the year. The Department of Health and Human Services said that in early November only 8,000 people had enrolled, but it refused to update those statistics for the Post. “Like the rest of the country, we thought we’d have pretty much a stampede. That obviously hasn’t materialized,” said Michael Keough, executive director of North Carolina’s plan. North Carolina’s plan is one of the largest, with 700 participants—one-third of the expected amount.

Federal officials contend that the plans are experiencing growing pains. They need more time to spread the word and tweak the premiums and benefits to spruce up the plans’ appeal. But the real problem is that coverage is too expensive. The health reform law was supposed to make premiums more affordable by saying that the newer versions of the pools cannot charge more in premiums than the average premium for other individual insurance in a particular state. But, as we know, premiums for individual coverage are expensive, so the base is high to begin with. “From my perspective, it is not a good match for people who have expensive conditions,” University of Kansas researcher Jean Hall told Goldstein.

The claims for the sick people who have used pool coverage are “proving very costly” in a few states, Goldstein noted, and she questioned whether the $5 billion Congress allotted to the program is sufficient to cover the medical costs of those needing care. During the debate, a few news outlets did examine that amount; the Associated Press, for one, questioned whether $5 billion was enough. But the pols and the advocates had other agendas and weren’t listening. For the public, the chatter about risk pools did not sink in.

For one person in Chicago, however, it did. The reform message reached fifty-seven year-old Will Wilson, whose story Goldstein relates. After an AIDS diagnosis in 2002, he ended up in bankruptcy because his insurance didn’t cover all of his monthly drug expenses. He said he remembers tears streaming down his face that night in 2009 when Obama told Congress that “health reform cannot wait.” Wilson became an activist, circulating petitions and going to demonstrations in support of reform.

After Obama signed the health reform law in March, Wilson told the Chicago Sun-Times, he had a grin on his face all day at the prospect of joining a high-risk plan. But in July, when he tried to get coverage through the Illinois high-risk pool, he discovered the monthly premium was nearly $600—almost as much as his rent. “It was like no way! I was floored, “ he said.

Goldstein’s story line may portend the future. What’s happening with high-risk pools may happen when the states set up their insurance exchanges three years from now. There will be subsidies, of course, to help people like Wilson swing the expensive premiums. But as Campaign Desk has reported many times, those subsidies will not be sufficient to help people with middle incomes, say in the $50,000 to $70,000 range, cover the premium costs. Even though the pols keep saying that insurance will be “affordable,” many families will find it is not.

Affordability was another of those key issues that the pols and the press glossed over. My New Year’s wish is for the press to lead a more robust discussion of the central features of the health reform law.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman. Tags: , , , ,