High-Risk Pools Include Higher Rates

WASHINGTON - Dwight Herron ran Oklahoma's high-risk pool program that helped individuals with pre-existing medical conditions get health insurance before the Affordable Care Act took effect.

On the whole, he said, the pool worked, helping 2,000 Oklahomans who could not otherwise qualify for insurance to cover the high-cost treatment of diseases like cancer.

But, Herron acknowledged, there were also problems along the lines feared by members of Congress who object to the Republican health plan that allows states to bring back high risk pools for sick and disabled individuals.

"The premiums were substantially higher" than health insurance for the healthy, said Herron, former chairman of the Oklahoma Health Insurance High Risk Pool.

The GOP bill continues the popular aspect of Obamacare guaranteeing people with medical conditions cannot be turned down for coverage. But states can meet that obligation with high risk pools and insurers can charge people with medical conditions higher rates if they drop their insurance and want to sign up again.

Health care analysts, like Sarah Lueck, of the left-leaning Center on Budget and Policy Priorities, said pools in Oklahoma and 32 other states that pre-date Obamacare were not adequately funded.

Risk pool advocates, including Oklahoma health officials, say there are ways to do better this time around. They said the GOP plan could help those individuals without health problems who have seen their premiums skyrocket in recent years.

Oklahoma was not the only high-risk pool state where people with medical problems had to pay high insurance rates, according to a Kaiser Family Foundation study in 2010.

People with pre-existing conditions paid up to 50 percent higher premiums in West Virginia and Iowa; 75 percent more in Kentucky, and twice as much in Texas. Obamacare barred insurers from charging the sick more than the healthy, bringing down costs for people with medical issues.

Deductibles, the amount people have to pay out of pocket before insurance kicks in, were also higher. More than half in high-risk pools nationally had deductibles between $1,000 and $3,000 and about a fifth had deductibles of $5,000 or more, the Kaiser study said.

In West Virginia, Iowa and other states, people with medical conditions had to wait six months after buying insurance before their treatments were covered. In Kentucky, Texas and Oklahoma, the wait was one year.

To mollify Republicans moderates concerned about making insurance unaffordable to sick people, House leaders added $8 billion in federal funding to the state pools over five years. This was on top of the $23 billion over nine years initially in the House bill.

Even with the extra money, the billions would only cover 110,000 people with pre-existing conditions, while keeping their costs the same, estimated Avalere, a health care consulting firm. That wouldn't be enough to cover the 180,000 people with medical conditions who now buy subsidized insurance in Texas.

The financial burden would be on the states, which now pay nothing to insure people with medical problems, to keep insurance from becoming too expensive. That's a concern for states struggling with budget deficit issues.

States could also decide not to change its policies for people with medical problems.

"It's a hard time to go to the legislature and say we need funding," Oklahoma's Herron said. "Teachers and schools are getting cut back. The roads are in horrible shape."

Grant Herring, a spokesman for Democratic West Virginia Gov. Jim Justice said the state will review its options, but "the last thing Governor Justice wants to do is hurt the most vulnerable people."

Republicans are looking toward high-risk pools because Obamacare has its own cost problems. Mandatory coverage of pre-existing conditions has resulted in healthier individuals paying more for health insurance and younger people opting out of insurance entirely, paying mandated fines instead.

That left fewer healthy people paying premiums than expected under Obamacare, a development that drove up insurance rates, causing a public backlash in the 2016 presidential election.

"There's a full-blown death spiral underway" said Sen. Pat Toomey, R-Pa., who is part of a group working on the Senate's version of bill to repeal Obamacare.

Contact CNHI Washington reporter Kery Murakami at kmurakami@cnhi.com.