Is High Risk Pool Eligibility Guideline Hampering Enrollment?

A recent Denver Post article discusses the current state of GettingUsCovered – the high risk pool health insurance program created last year by the PPACA.  The program is very similar to the twenty-year-old CoverColorado, but does have some key differences.  GettingUsCovered requires that an applicant be uninsured for at least six months before joining the program, while CoverColorado does not.  CoverColorado has different pricing depending on an applicant’s income (reduced rates are available if the applicant’s household income is lower than $50,000/year), while GettingUsCovered does not.  And GettingUsCovered only offers one policy, a $2500 deductible plan.  CoverColorado, on the other hand, offers seven standard deductible levels plus an HSA-qualified option.

But beyond those differences, the two plans are very similar.  Both are designed to insure people who are not able to obtain health insurance in the individual market because of a pre-existing condition.  Both plans allow people to enroll if they have certain medical conditions, even if they have not already been declined by a private carrier.  Both plans offer policies to people who have recently been declined by a private health insurance carrier.  Both plans also offer coverage to people who have been offered a policy in the individual market, but with an exclusion on a specific pre-existing condition.  The only difference in terms of eligibility is that CoverColorado will also accept an applicant who has been offered a policy with a rate that exceeds the rate of a comparable CoverColorado policy.  This option is not available from GettingUsCovered.

Ten years ago, pre-existing condition exclusion riders were very common in the individual health insurance market.  These days, they are much less common, as more carriers have switched over to a rate increase model of underwriting.  While a particular condition might have once resulted in a specific exclusion, it’s now much more likely to result in an increased premium (most rate increases are between 25% and 100%).  A significant underwriting rate increase can easily make a policy more expensive than a comparable policy from CoverColorado, but it wouldn’t have any impact on eligibility for GettingUsCovered.

When GettingUsCovered was unveiled last year, I found it curious that they opted to make the policy available to people with pre-existing condition exclusion riders (which as I mentioned, are not very common anymore), but not to people who are being offered policies that are priced far above “standard” rates.  Obviously, people who are declined in the individual market are eligible for coverage in a high risk pool, but far more people are offered policies with a rate increase compared with the number who are declined all together.  GettingUsCovered has enrolled 830 people so far, but had expected about 4000.  Perhaps allowing people to enroll if they were offered a private policy with a rate increase exceeding some set level would increase the enrollment numbers?

The most interesting part of the Denver Post article was the fact that GettingUsCovered members are using more than 3000 hospital days per 1000 members per year, compared with 750 hospital days per 1000 members per year for CoverColorado insureds.  This would indicate that the population of people covered by GettingUsCovered is quite a bit sicker than the population covered by CoverColorado.  I wonder if this has anything to do with the eligibility guidelines?  Both plans accept people who have been declined by a private carrier, but CoverColorado also accepts people who have a pre-existing condition that results in an underwriting rate increase (as long as the rate increase puts the cost of the policy above the cost of a similar CoverColorado policy).  In terms of underwriting actions for less serious conditions (those that don’t result in a decline), GettingUsCovered only takes people who have been offered a policy with an exclusion rider… which most carriers don’t do anymore.  Perhaps this is resulting in GettingUsCovered being comprised mostly of members who have a condition that would result in a decline in the individual market, while CoverColorado has those members as well as members who have less serious conditions that simply result in a higher-priced policy in the individual market.

GettingUsCovered has added a question to their homepage, asking people why they decided not to apply, if they had originally intended to to so.  Perhaps the feedback they get will help the program to grow its enrollment.

About Louise Norris

Louise Norris has been writing about health insurance and healthcare reform since 2006. In addition to the Colorado Health Insurance Insider, she also writes for healthinsurance.org, medicareresources.org, Verywell, Spark by ADP, and Boost by ADP, and Gusto. Follow on twitter and facebook.

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