The newly-created high risk health insurance pools are now operating in all 50 states. In 35 states – including Colorado – high risk pools were already available for people who were unable to get medically underwritten individual coverage. But for people who lived in the other 15 states and previously had no options at all, the new pools are likely a welcome relief… if they can afford the premiums.
The premiums – although reasonably priced when compared with other health insurance policies and considering the fact that they are covering people with pre-existing conditions – still amount to an average of $455/month for a 50 year old non-smoker (in states where the federal government is running the pools), which is not affordable for everyone.
Another issue is eligibility. In order to qualify for coverage in one of the new high risk pools, a person has to have been uninsured for at least six months. This was implemented to keep people from switching off of other coverage (including existing high risk pools) and flooding the new pools with members. But of course, it also leaves some people high and dry. Those who have been uninsured for a month or two and find themselves having to wait several months before qualifying for the new pools, and those who are without coverage after exhausting COBRA, or after an employer goes out of business and stops offering health insurance all together. Of course, in some states (like Colorado) there is another high risk pool option for those people. But there are definitely people who are falling through the cracks in the hodge podge of high risk pool systems.
A few months ago, I described the similarities and differences in the two high risk pools we now have in Colorado: Cover Colorado, which has been operating for years, and the new pool, GettingUsCovered. Colorado has done a nice job of integrating the two pools, and both websites operate in tandem to direct potential applicants to the correct site. On either site, before applying, you have to answer a few basic questions, including whether you’ve been uninsured for at least six months. If you have, you’ll end up at the GettingUsCovered site. If you have not, you’ll find yourself on Cover Colorado’s site. Cover Colorado does have a pre-existing condition waiting period of six months if an applicant has been uninsured for 90 days or more prior to joining Cover Colorado, but there is no requirement that the applicant be uninsured for an specific amount of time before applying.
There is another significant difference between Cover Colorado and GettingUsCovered, in terms of eligibility. Both plans allow eligibility for applicants who have one of several specific medical conditions, and both plans accept applicants who have either been declined by a private insurance company or offered coverage with a pre-existing condition exclusion. But while Cover Colorado also allows people to enroll if they have been offered a private policy with a rate that is higher than a comparable Cover Colorado plan, GettingUsCovered does not allow this option. This is a significant difference, especially since most of the major individual health insurance carriers in Colorado have moved away from exclusion riders in favor of higher initial premiums over the last several years. Ten years ago, exclusion riders were very common, but today, they are much less so. Although serious pre-existing conditions still usually result in a decline, private carriers often opt for rate increases (usually between 10% and 100%) instead of exclusions when an applicant has one of a myriad of less severe pre-existing conditions (This should not be confused with annual rate increases that happen on all policies. Initial rate increases occur before a policy is issued, and are based on medical underwriting. The applicant then has an option to accept the policy or not). Initial underwriting rate increases can sometimes make a policy more expensive than a comparable high risk pool policy, but in Colorado this would only make an applicant eligible for Cover Colorado, and not for GettingUsCovered. In states that have two risk pool options, this likely isn’t an issue. But for states that have only one option, or where neither option allows people to qualify for the high risk pool based on the initial price of their individual coverage, some people – who do have pre-existing conditions – might find themselves unable to afford health insurance simply because they got a rate increase rather than an exclusion rider.