When health care reform was being discussed in legislative sessions in 2009 and 2010, there was a lot of consensus that we needed a provision to offer coverage for people who couldn’t qualify for medically underwritten plans. The idea of guaranteed issue health insurance for people with pre-existing conditions was generally a popular one (although how to pay for it caused some consternation, as is usually the case with such things). The PPACA paved the way for federally-funded high risk pools that could either be run by the states (like Colorado’s GettingUSCovered) or federally administered. The new high risk pools began to operate in the summer/fall of 2010, but all across the country they have had much lower-than-anticipated enrollment numbers in their first year.
Recently I wrote about the possibility that the low enrollment numbers – at least in Colorado – might be linked to the lack of eligibility for GettingUSCovered based on an initial underwriting rate increase (as opposed to a decline or a specific condition exclusion rider) from a private health insurance carrier. Since most carriers these days use rate increases rather than exclusion riders, the federally-funded high risk pool would likely draw more applicants if it allowed people to qualify if their private health insurance application had resulted in a rate increase of at least a set amount (say, 50%, for example).
Cost is obviously an obstacle, as it is for any health insurance product. There are plenty of people who would like to be insured but simply cannot afford it. Before the federally-funded high risk pools were unveiled, we had several clients ask us if the coverage was going to be free of charge. Unfortunately, even though people who qualify for the high risk pools will likely use far more in benefits than they pay in premiums, the cost is still a barrier for a lot of people.
But even more than cost, the requirement that applicants be uninsured for six months prior to applying for coverage is a barrier that keeps people from applying. I understand the idea behind the six months without coverage requirement (to limit enrollment in what congress thought would be a very popular plan), but it seems that the provision is actually causing some adverse selection instead: People have to be uninsured at least six months before they can apply, but once they qualify, they have coverage for pre-existing conditions right away. That’s likely to encourage people to go more than six months without coverage and wait until they are in need of care to sign up.
CoverColorado – the high risk pool that Colorado has had in place since the early 90s – instead allows eligible applicants to enroll as soon as they are without another coverage option, but makes them wait to receive coverage for pre-existing conditions if they have been uninsured prior to applying. That system encourages people to sign up as soon as they are eligible rather than waiting until they need care. It would seem that the federally-funded high risk pools might be able to boost their enrollment and also avoid adverse selection by switching to a similar eligibility model.