Montana’s High-Risk Pool Out Of Funds

HELENA - Montana's federally funded health insurance "high risk pool" for the hard-to-insure will blow through its initially allocated $16 million this year, and needs another $6 million to $7 million to cover its 2012 costs, officials said this week.

The $16 million, issued in mid-2010 as part of the federal health-reform law, was supposed to cover costs of the subsidized health insurance program through 2013, for as many as 400 people covered by the pool.

Yet initial cost estimates turned out to he too low, because the medical costs per covered customer are higher than expected, said Cecil Bykerk, executive director of Montana's pool.

"Our numbers (for enrollment) were fairly accurate, but per-member, per-month claim costs have been much higher than the original assumptions that we used," he said.

Bykerk said the U.S. Health and Human Services Department has committed to funding Montana's program through 2012 and will need to provide more money to cover program costs for 2013 and partly into 2014.

Montana's pool currently

provides health insurance for about 290 people, who are eligible if they've been without insurance for at least six months and have a pre-existing condition that made them uninsurable or made available insurance unaffordable.

Bykerk said people getting coverage through the pool typically have high-risk conditions or diseases, such as cancer, diabetes, heart conditions, HIV-positive, hemophilia or organ transplants.

The pool offers insurance at a price that would be charged the customers if they were healthy. It then covers the medical costs, which far exceed the income from premiums paid by the customers.

The pools, set up in every state in 2010, are part of the controversial health reform law known to detractors as "Obamacare."

They're designed to offer affordable coverage to hard-to-insure people until 2014, when new, federal subsidies kick in to help people buy health insurance they're required to have.

Bykerk said Montana officials used a formula, based on enrollment and projected costs, to determine the program's estimated cost, and were allocated $16 million in federal funds in mid-2010 to fund the program through 2013.

Montana state insurance officials estimated that 400 people would enroll, and proposed capping the program when it reached that number.

The program has never hit the 400 enrollees, but the cost per enrollee has been much higher than anticipated, he said.

Last summer, states running their own program submitted projections to HHS. Reports from nine states, including Montana, showed that they were exceeding their initial allocation of money.

Montana spent about $8.5 million of its funds through 2011, but will need an additional $6 million to $7 million, on top of its initial $16 million, just to get through 2012, state officials said.

The program will do another projection in mid-2012, to determine what additional funds it will need to cover costs for 2013, Bykerk said.

Lucas Hamilton, spokesman for state Auditor Monica Lindeen, whose office oversees the pool, said it has served more than the 290 people currently covered.

Some have qualified for the subsidized coverage, bought it, used its benefits, and then stopped paying for the coverage.

Hamilton said there obviously was a "pent-up need" for the program when it began, and that Lindeen's office is still promoting it.

"There was a serious need for health coverage, and this fit the bill," he said.