The Department of Health and Human Services (HHS) is beginning the process to form high-risk health insurance pools for the uninsured. HHS Secretary Kathleen Sebelius has sent letters to state officials asking which states might be interested in forming temporary, high-risk pools, or expanding on what they already have. The program under the new federal healthcare law is to be established with $5 billion provided by the federal government. It is voluntary for states and is designed to provide coverage to uninsured people with pre-existing conditions.
The program money is scheduled for availability beginning on July 1, and the program will shut down in 2014, when pre-existing condition restrictions are banned in all health insurance.
Sebelius said in a statement that she’ll await the responses from governors or independent state insurance commissioners until April 30. But she also pointed out in the letter that “the law directs HHS to carry out the program directly or through contracts with states or private, nonprofit entities,” so, even if states decline, the agency will push forward with the program. The letter from Sebelius laid out some of the requirements for benefits and premiums:
- Benefits must have an actuarial value of at least equal 65% of total allowed costs;
- An out-of-pocket limit no greater than the applicable amount for high-deductible health plans linked to health savings accounts;
- Premiums must be established at a standard rate for a standard population (that is, not exceed 100% of the standard non-group rate); and
- Not have age rating greater than 4 to 1.
According to a report from the U.S. Government Accountability Office, 35 states were already running high-risk pools of their own in June of 2009.
April 7, 2010