Federal High-Risk Insurance Covers 50,000, but Will End in 2014

Ernie Shannon's picture
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One of the first moves of the Obama Administration after the passage of the Affordable Care Act two years ago was to establish a temporary high-risk pool for the uninsured and invite states to become joint participants. The pool immediately provided $5 billion of health insurance coverage for people lacking insurance due to a pre-existing condition.

Today, 29 states have accepted the offer and not quite 50,000 people have received benefits.

In April 2010, the invitation to partner with the Department of Health and Human Services looked too good to pass up for many states already paying for their own high-risk pools. In fact, 35 states had maintained some kind of fund to assist people unable to quality for traditional health insurance coverage for more than 20 years. With the introduction of the new program the federal agency presented five options for states to consider:

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1) Operate the new federally funded high-risk pool alongside a current state high-risk pool;
2) Establish the new federally funded high-risk pool where no state program existed;
3) Build upon other existing coverage programs designed to cover high-risk individuals;
4) Contract with a current HIPAA carrier of last resort or other carrier, to provide subsidized coverage for the eligible population; or
5) Do nothing, in which case Health and Human Services would carry out a coverage program in that state.

Since the program was officially unveiled in July 2010, 29 states decided to establish a federally funded high risk pool while the other 21 have either opted out of running any pool at all or continue to manage a state-run pool independent of the federal government. For those 21 states, Health and Human Services has stepped in and setup the federally funded program outside of state control.

The states choosing to forego the joint state-federal program include Alabama, Arizona, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Vermont, Virginia, West Virginia, Wyoming, and the District of Columbia.

Across all 50 states, the number of people enrolled in the high-risk pool insurance coverage reached 48,879 as of December 31, 2011. Interestingly, the 29 participating states account for 36,129 of the enrollees or 74 percent of the total program while the 21 non-participating states have 12,750 individuals enrolled in the federal-only program.

The temporary high-risk pool is exactly that, temporary. The program ends on January 1, 2014 when the full implementation of the Affordable Care Act will require health insurance providers to extend coverage to everyone including people with pre-existing medical conditions.

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