The Cavalcade of Risk was hosted this week by Anisha at Nerd Wallet, and this edition is almost entirely devoted to health insurance and health care reform. This article by Van Mayhall about pre-existing condition risk pools ceasing to accept new applications should be of particular interest to anyone watching the progress of healthcare reform. Van notes that the 23 federally-run state risk pool programs have suspended new applications, and that the 27 states with state-run risk pools will stop accepting new applications after March 2, 2013 (Colorado is one of those, with GettingUSCovered; applications for new coverage through GettingUSCovered have to be received by March 2 or they cannot be accepted).
When the Pre-existing Condition Insurance Plan (PCIP) was first rolled out by the ACA in 2010, there were definitely concerns right from the beginning that funds would run dry before 2014. The program was intended as a stop-gap to help people with pre-existing conditions secure coverage before 2014 (as of January 2014, PCIP will no longer be needed because all health plans will be guaranteed issue), and HHS has indicated that currently enrolled insureds will be able to keep the plan through the end of this year. But for people who find themselves unable to get individual health insurance this year, the only solution may be to wait until applications are available for guaranteed issue coverage (late this year, for a January 1 effective date), unless they live in a state that has also maintained it’s own high risk pool, independent of the PCIP program.
Fortunately, Colorado has CoverColorado, which will continue to operate. But if you live in a state that has a federally-funded but state-run high risk pool and you need to secure coverage through it, make sure that you get your application submitted before March 2, 2013.
Looking beyond the PCIP, I have to wonder how this bodes for the health insurance exchanges/marketplaces and the entire individual health insurance market once plans are all guaranteed issue. The cost of caring for people with pre-existing conditions is high – there’s not really a way around that unless we can start making inroads into reducing the actual cost of care. And although guaranteed issue health insurance is definitely a step in the right direction in terms of getting access to healthcare for everyone, it’s also going to result in higher health insurance claims, and almost certainly higher health insurance premiums in the individual market. Hopefully the individual mandate will be successful at bringing enough young, healthy people into the insurance pool to offset the higher cost of care for people with expensive pre-existing conditions. With enough healthy people enrolled, the guaranteed issue individual market could be a solid health insurance pool. But if the balance shifts more towards unhealthy people, the individual market could start to resemble the structure of the PCIP, which isn’t sustainable in the long run without huge premium increases.