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Health insurance
for medically-uninsurable individuals
http://www.healthinsurance.org/riskpoolinfo.lasso
According to a new
2006 report by United Health Foundation, 15.9 percent (46.6 million
people) of all Americans are uninsured. State-sponsored risk pools
are aimed at a small slice of those Americans : those who can afford
to buy health insurance, but are
denied
affordable health insurance coverage by private companies
because of a pre-existing medical condition.
In a nutshell, here's the problem:
A
majority of people -- about 60 percent according to the
U.S. Census Bureau
-- get health care through their employer under group health
insurance programs.
Another
27 percent of the population are covered by government sponsored
health care, through Medicaid, children's health care programs,
military health care, native American health care programs and
various state programs for low-income people.
Those
left over are the self-employed or those working for very small
companies which do not provide health insurance benefits. If that
describes you, you must directly purchase coverage directly through
private health insurance companies. If you and your family have
always been healthy, you'll be able to pick from a variety of plans
available in your state with various benefits and costs. However, if
you've already had any medical conditions, or other high-risk
factors, you may be unable to find a health insurance company that
will insure you at
any
price.
Why is
this? Health insurance companies are in business to make money. They
don't want to sell insurance to people who are most likely to
utilize it. At the end of the day, what determines their
profitablity is that they need to take in more dollars in premiums
than they pay out in benefits and administration costs.
When a
health insurance company sells a policy to a business it gets all
that businesses' employees, healthy and sick -- state laws require
it to do so. The insurance company uses complicated formulas by
actuaries to set their pricing, based on the fact that the premiums
paid by the healthy employees will help pay for the costs of those
employees who are not.
If
you are buying a policy direct from an insurance company, your
policy is individually underwritten, which means you are essentially
a group of "one" when the health insurance company determines how
likely it is to take in more premium dollars from you than it pays
back in benefits. It is in essence making a "bet" on you not getting
sick; if it appears to be a bad bet in your case, they simply won't
make it.
That's
where state sponsored risk pools come in. Began in 1976 In
Minnesota, these plans create a pool out of all the individuals that
private insurance companies do not want to sell policies to as
individuals, then provide a state-sponsored health insurance plan
these individuals can buy into, albeit at a higher cost than if they
were able to qualify for a private plan.
Currently
34 states offer some form of risk pool, covering about 183,000
people. That may not seem like a lot when you look at America's
total number of uninsured, but for many people it's the difference
between stuck in a deadend job to keep its benefits or able to
switch jobs to better your family or even to become self-employed.
State risk pools vary greatly in
plans, benefits, eligibilty and funding. Some do an excellent job in
providing alternatives for their citizens while others do very
little. AAt their core, risk pools are state-created, nonprofit
association that -- in most states -- does not require tax dollars
for its operational purposes. The risk pools can be a temporary
stopping point for individuals who are denied health insurance for
medical reasons. Risk pools often help individuals fill a gap in
insurance coverage.
More information on risk pools and
the states they are available in is below.
State
health risk pools which have Web sites
Common questions about health insurance
risk pools
Who is eligible to participate in a risk pool?
State residency
All individuals applying for plan
coverage must be residents of that state. State legislation outlines
a range of residency requirements for eligibility.
Proof of at least ONE of the
following:
-
Proof of rejection.
Individuals must prove they have been rejected for similar
health insurance coverage by at least one insurer.
-
Presently insured with a higher
premium. State
residents are eligible for plan coverage even though they are
currently insured, if their present insurance has a higher
premium than offered under their plan.
-
Presently insured with a rider or
rated policy. An
individual is eligible for plan coverage even though they are
currently insured, if their present insurance has a rider
attached or is rated.
Reciprocity agreements
Several (but not all) states include a reciprocity agreement for
acceptance into the plan, which means that if an individual has been
enrolled under a similar state plan, has met the pre-existing
waiting period and has not used up the lifetime maximum, he or she
is eligible to apply in another state after meeting the residency
requirement.
Who is not eligible to participate?
Non-residency
An individual is no longer eligible
for plan coverage if he or she is no longer a resident of the state
(although some states have reciprocity agreements).
Eligible for Medicare or Medicaid
Many of the state plans do not allow
an individual to apply for plan coverage if the individual is
eligible for, or receiving, Medicare or Medicaid. However, several
states have adopted a high-risk plan for Medicare eligible
individuals.
Termination of Coverage
An individual is not eligible for
plan coverage if he or she has terminated coverage in the plan
unless at least 132 months have elapsed since such coverage.
Extended Lifetime Benefit
An individual is not eligible for
plan coverage if he or she has reached the maximum benefit level
authorized by the plan.
Inmates
An individual is not eligible for
plan coverage if he or she is an inmate of a public institution.
Specific Exclusions
At least one state has excluded
coverage for certain diseases or medical conditions.
Enrollment Cap
Several states have placed an
"enrollment cap" on their plans. Under this mandate, the plan will
accept only a certain number of individuals into the plan at any one
time. Others applying for coverage must be placed on a waiting list
for acceptance into the plan.
Which states have risk pools?
By 2006, 33 states had passed risk
pool legislation. The states on the following map are participants.
Tennessee approves state risk pool for guaranteed access
following scale back of Tenncare program
The Tennessee legislature and
Governor approved a major health care legislative package in May,
2006. The bill included four major new programs undertaken to
provide state-assisted coverage options following the cutbacks made
to the state's large Tenncare Medicaid expansion program.
The new programs include:
-
Access
Tennessee,
a new high-risk pool for the individual market;
-
Cover
Tennessee,
a new program to offer low cost,
minimum benefit, state and employer-subsidized coverage to low
income workers at employers who previously didn't offer
coverage;
-
CoverKids,
a new Tennessee Children's Health
Insurance Program for low income uninsured children not eligible
for Medicaid;
-
Tennessee
Center for Diabetes Prevention and Health Improvement,
a new state-wide diabetes prevention state agency
The new
risk pool is to become operational in early 2007. Plans are to offer
a limited open enrollment period for those eligible who previously
were in Tenncare. AccessTennessee premiums are be between 150 to 200
percent of standard under the law. However, the legislation also
provided for $13 million for premium assistance for low income
eligible people, the largest amount for a state low income premium
subsidy program. See pages 207-210 for more details about the new
program.
Statistics for 2005 (most current annual data) for all state risk
pools
15.9 percent (46.6 million people) oa
all Americans are uninsured.
Average Monthly Enrollment -for all
pools nationwide was 183,903.
Total Claims - $1,493,883,872.
Total Premiums - $951,237,653.
Total reported administration costs -
$82.124.490
Total combined deficit for all
states- (claims + admin - premiums) was $624,770,709
Source: Communicating for Agriculture
and the Self-Employed, Inc.
Other risk pool info on the Web
Following are additional sources of
information available from Internet web sites concerning state and
federal insurance programs and regulations addressing coverage for
high-risk individuals.
National Association of
State Comprehensive Health Insurance Plans
NASCHIP's Web site includes a
description of state high risk health insurance pools, addresses,
phone numbers and links to those with Web sites.
Georgetown University
Georgetown University's
Institute of Health Care Research and Policy has established a new
website that provides consumer information about how people can
access and keep health insurance coverage. Includes information
about state programs and regulations for group, individual and HMO
coverage for each of the 50 states.
HIPPA Insurance Reform- Consumer Information
Life events, which can
vary from the birth of a baby, the onset of a chronic condition or
disabling disease, to divorce, changing jobs or a business closing,
cutting back on staff or reducing the number of hours you work may
affect your health insurance coverage.
National Association of Insurance Commissioners
The National Association of
Insurance Commissioners (NAIC) is the organization of insurance
regulators from the 50 states, the District of Columbia and the four
U.S. territories.
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