Don't misunderstand me: high-risk pools are working for those who are enrolled in them! They are saving lives, preventing bankruptcies and relieving gut-wrenching anxiety. It's just that the beneficiaries are few and far between. Only 2% of the people the system is designed to handle (some 350,000 at capacity) have actually enrolled as of November.
... after two or three months of operation in most states, the plans have enrolled only 8,011 people, according to figures made available for the first time by the Department of Health and Human Services. Although there are notable exceptions, enrollment in most states as of Nov. 1 was well below 10 percent of capacity. -- New York Times
Even giving generous allowance for ramp up that's very disappointing. If the system were to admit 8000 new participants per month until January, 2014 (when it is scheduled to be phased out by the exchanges) it would only reach 76% of its expected enrollment! Many expected the program to be oversubscribed.
High risk pools were created by the PPACA (the Health Care Law). They come in two flavors: those administered by the federal government in states that did not wish to administer their own pools (e.g., Florida), and those administered by states who did wish to run their own programs according to federal guidelines (e.g. New York). The federally-run pools came into existence in July, but some states like California only got their programs up and running last month.
Why haven't they been more successful in enrolling those they were meant to help? A number of factors have contributed:
Administrators of the risk pools, which are formally called Pre-existing Condition Insurance Plans, point to a variety of explanations for low enrollment: lack of awareness among a hard-to-reach target population, a requirement that applicants be uninsured for at least six months and premiums that, although set at market rates, are often unaffordable.
I can't talk much about outreach programs, but it does seem that many people are unaware of the program. I was shocked by one relatively astute person who belongs to an email list I participate in. He has been unable to obtain insurance for his spouse or himself because of pre-existing conditions but was completely unaware that the program had come into existence and he could apply to it. (He's now in the process of applying, so hopefully a happy ending soon).
As for the high cost of premiums, The Department of Health and Human Services is certainly aware of the problem. In fact, they've adjusted the federal program as of January 1, 2011 to reduce premiums and deductibles:
2011 Standard Plan
The existing option in PCIP has been improved. The 2010 Standard Plan had a single, combined medical and pharmacy deductible of $2,500. The 2011 Standard Plan now has two separate deductibles -- a $2,000 medical deductible and $500 drug deductible, while also offering premiums that are almost 20% lower than the 2010 premiums. The reduced pharmacy deductible is particularly beneficial for people who take one or more maintenance medications. The lower premiums result from experience and are expected to be more affordable for the eligible population with pre-existing conditions.
2011 Extended Plan
A new plan option, called the Extended Plan, has a $1,000 medical deductible and $250 drug deductible plan. The premiums for the 2011 Extended Plan will be slightly higher than 2010 premium levels. Just as with the Standard Plan, separating the drug and medical deductibles makes this plan option more valuable for those enrollees who take one or more maintenance medications.
Health Savings Account Option
The Health Savings Account (HSA) Option will carry a $2,500 deductible but with premiums that are 16% less than 2010 premiums. As with the current plan, this option is eligible to receive favorable tax treatment by the federal government when used with a Health Savings Account (HSA).
Child-Only Rate
To ensure that children have more affordable access to coverage, HHS has established premiums targeted for covering children under PCIP, creating a child-only rate for PCIP enrollees between 0-18 years of age.
This will help to a limited extent; if premiums are cheaper a few more people will find it possible to pay them.
Still, there is no obvious reason why HHS could not redo the federal plan's cost structure to be flatter, and encourage state programs to do the same. Currently, premiums for those who are young are generally quite inexpensive, while for those who are older they are extremely pricey. Reducing premiums from $600-$700 a month for a 60-year old down to $400 a month could be a much more effective alternative than simply reducing them 20% across the board. Perhaps that will be a next step if and when the adjustments outlined above don't produce a significant increase in enrollment. (Pennsylvania went with a completely flat rate structure and, so far, has had more enrollments per capita than any other state).
But there is only so much HHS can do and keep within the law as Congress wrote it. That six month wait is a major contributor to the lack of enrollment, but it would take an act of Congress to modify it.
All may not be lost. The Republicans in Congress should be more than willing to do anything they can to enhance the use of high-risk pools: they say so explicitly (and no, I'm not making this up):
The Republicans' Plan to Re-Reform Health Care:
OUR PLAN TO REPEAL THE JOB KILLING HEALTH CARE LAW AND PUT IN PLACE REAL REFORM
...Health care should be accessible for all, regardless of pre-existing conditions or past illnesses. We will expand state high-risk pools, reinsurance programs and reduce the cost of coverage.
So, Speaker-to-be Boehner, there are specific, simple tweaks to the high-risk pool statutes that Congress could legislate to make the program able to help more people:
- Reduce the six-month without-insurance requirement. At least by half.
- Allow people with pre-existing conditions who lose their insurance because their COBRA runs out immediate enrollment in the high-risk pools
- Allow those who have a pre-existing condition, yet managed to get insurance through an insurance company but who are paying far more than they would be if they enrolled in the high-risk pools, to switch to the high-risk pool.
- Allow children, regardless of whether they have pre-existing conditions, who have been frozen out of the insurance market because insurers have refused to continue to issue child-only policies, into the high-risk pool system.
And I suspect there are others. I'm sure people out there could think of further modifications.
Will Congress do any such thing? The high-risk pools are 95% or more underutilized at this point. Republicans claim that they support extending high risk pools and even put it in writing. And there are plenty of potential enrollees:
In 2008, a Harvard Medical School study found as many as 11.4 million working adults in the U.S. who suffered chronic conditions were uninsured, many of whom had forgone medical care. -- Reuters
If you believe the next Congress will enact any such thing I have a bridge to sell you on some swampland a prince from Nigeria promised me on the intertubes. Call me.