One of the provisions of the new health care reform law is $5 billion in federal funding for high risk pools, set to begin operating this summer, that will provide health insurance for people with pre-existing conditions who don’t currently have health insurance. This is intended to be a stop-gap until 2014, when high risk pools will presumably no longer be necessary, since private health insurers will have to begin accepting all applicants in 2014.
Although there are currently some states that have no high risk pool coverage at all, we’re lucky here to have Cover Colorado. Cover Colorado is a high risk pool option for people who have been declined by a private health insurer, or who have been offered coverage with a pre-existing condition exclusion or an initial rate increase that makes the private policy more expensive than Cover Colorado.
States like Colorado that already have high risk pools will still be able to participate in the new risk pool program, and will be able to set up a new pool with the federal money. But the new program would require that the risk pool premiums be the same as the average rates in the private health insurance market, and would also require that a person have been uninsured for at least six months before enrolling in the risk pool. Cover Colorado currently offers premium subsidies to people with household incomes under $50,000/year, but the premiums are still typically more than the average rate in the private health insurance market. In addition, Cover Colorado allows an applicant to transition directly from another policy (COBRA that is ending, or another state’s high risk pool, for example) to Cover Colorado, with no gap in coverage.
The details of the program are described in the Senate Bill, starting on page 41, in the section titled “Subtitle B—Immediate Actions to Preserve and Expand Coverage” (section 1101). One of the requirements for a state to participate in the new risk pool program is that the state may not cut funding that it normally spends on its current risk pool: “a State shall agree not to reduce the annual amount the State expended for the operation of one or more State high risk pools during the year preceding the year in which such contract is entered into.” So I assume that Cover Colorado will continue to receive its current funding, and the new program will provide additional access to health insurance for people in Colorado who have pre-existing conditions. The new law also has a provision (subsection e) that prohibits insurers or employers from encouraging a sick person to drop existing private health insurance in order to switch to the risk pool coverage. So hopefully the risk pool program will truly serve to expand access to care rather than just shuffle high-cost insureds from one policy to another.