High-risk pools are run by the government. The government that ran them in the past was always the State government. Those State-run High-Risk Insurance Pools still exist. Now the Federal Government is entering the High-Risk Pool industry. The Federally established Health Insurance High-Risk Pool will be totally separate in all States and other jurisdictions from any existing High-Risk Pool.
There are reportedly 35 States with High-Risk Insurance Pools of various kinds at this time. There are about 200,000 people in them. See Robert Pear, "Insurance Pools Readied in Some States/Health Coverage for High-Risk Patients Could Start by August" p. 12, col. 1 (New York Times Nat'l ed., Sunday, June 27, 2010). The results of the Federal intervention into High-Risk Pools are a mixed bag. Here are some things that are clear enough to know, however.
First, losing money is hard-wired into the DNA of High-Risk Pools, as they say. High-Risk Pools have always and everywhere lost money and they lose money now. It is certain that the Federal scheme establishing High-Risk Pools for Health Insurance will lose money too.
Second, the new Federal Health Insurance High-Risk Pools require that applicants have a chronic condition and that they be uninsured for Health Coverage for six (6) months.
Third, the new Federal Health Reform Law "mandates that premiums for the new coverage must be the same as the standard rate for a healthy adult in that state." Walecia Konrad, "Patient Money/High-Risk Insurance Pools to Begin Next Month" p. B6, col. 1 (New York Times Nat'l ed., "Personal Business" Section, Saturday, June 26, 2010).
Fourth and last (yes, I know, this violates the "rule of 3"), the reaction of States to Federal Health Insurance High-Risk Pools differs greatly. The differences among participating States include the date when Health Insurance High-Risk Pool Coverage will begin; in some States, that will mean August or September, 2010. All States according to the schedule set out in the Federal Law were intended to participate beginning on July 1, 2010. Consult the response of your particular State at www.naic.org, the web site of the National Association of Insurance Commissioners, before you attempt to advise clients how your State is approaching this issue. On that site, you will find a map of the United States; locate your State and go from there.
In general terms, there are basically two (2) groups of States, more or less breaking down into two groups of 20 in rough numbers:
(1) The Federal Government will award contracts to administer Health Insurance High-Risk Pools in about 20 States.
(2) A separate group of about 20 States consists of States which did not choose to wade into the Federal Pool. The Federal Government will reportedly step into that vacuum and run its Pools "through a private nonprofit entity." Robert Pear, New York Times, supra.
In addition to searching the National Association of Insurance Commissioners' web site for information on your particular State, at www.naic.org, other resources available to you and your clients can include the direct web site of your State's insurance Commissioner (which in Florida is www.floir.com), and effective July 1, 2010 (keep your fingers crossed) perhaps you can search the Department of Health and Human Services' web site at www.hhs.gov about your particular State.
The author is Co-Chair of the American Bar Association Health, Life and Disability Insurance Subcommittee of the Litigation Section.
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