According to the analysis, roughly 5.6 million Americans will be eligible for the high-risk pools, while the $5 billion will only fund 200,000 Americans for the full life of the temporary program if funding is similar to that provided by existing state high-risk pools. This number was determined by calculating the an estimated annual subsidy of $6,000-$7,000 per participant needed to bring that person’s premium within 100 percent of standard rates and multiplying by the four-year lifespan of the pools.
Generally, the temporary program is open to citizens and legal residents who have a pre-existing condition and who have been uninsured for at least six months. The law does not specify what benefits must be provided, but the pools must cover at least 65 percent of the cost of whatever services are covered. The coverage also must have an out-of-pocket limit no higher than the limits established for high-deductible health plans linked to health savings accounts — $5,950 for an individual and $11,900 for a family in 2010.
Premium rates may vary only by age, family type, geographic area and tobacco use. The highest age rate may be no more than four times the lowest. According to the law, rates must “be established at a standard rate for a standard population.” That is, they must be equal to 100 percent of the rate that individual insurers in the same area would offer for comparable benefits for a population that did not present high medical risk.
The analysis points out, “It is likely that policy makers at both the federal and state level will have to choose between two basic courses. They can simply open the doors to programs that are more generous than most current state pools and allow the programs to reach capacity…Or they can look for ways to limit entry to the program to those most in need and/or to stretch the dollars to serve more people. How much leeway they have to modify the outlines of the program is uncertain.”
Read the NIHCR’s release on high-risk pool funding.
