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Health plans for high-risk patients lag

Health plans for high-risk patients lag

Obama, states step up efforts; Some wary of cost, GOP repeal drive

By Amy Goldstein

Washington Post / December 28, 2010

WASHINGTON — President Obama’s administration and states are stepping up their efforts to motivate people to buy government-sponsored health plans for high-risk patients, as the new program continues to attract only a fraction of the projected customers.

At the same time, since the high-risk insurance pools began in late summer and early fall, the medical bills have been much higher than anticipated in a few states, raising the question of whether the $5 billion that Congress has allocated for the program could run out even if relatively few people join.

The Pre-Existing Condition Insurance Plan, as the program is officially known, is one of the first parts of the new health care law to be implemented, and federal health officials contend the plans are experiencing growing pains. It will take time to spread the word and to adjust prices and benefits so the plans are as attractive as possible, they said.

State-level directors of the plans agree, in part. But in interviews, they also said the insurance premiums are unaffordable for some who need the coverage — and that some would-be customers are skittish about the plans’ stability as federal lawsuits and congressional Republicans try to overturn the entire law. The program is an early test of Obama’s argument that the public will embrace the politically divisive law once they see its advantages firsthand.

According to some health policy researchers, the success or failure of the pools also could foreshadow the complexities of making broader changes in health insurance by 2014, when states are to open new marketplaces — or exchanges — for Americans to buy coverage individually or in small groups.

Under the health-care legislation that Democrats pushed through Congress in March, the special health plans were designed as a temporary coping mechanism for a small but important niche among the nation’s 50 million uninsured: people who have been rejected by insurance companies because they are already sick. Twenty-three states have created their own high-risk pools. The rest used an option in the law to let their residents buy coverage through a new federal health plan.

Last spring, the Medicare program’s chief actuary predicted that 375,000 people would sign up by the end of 2010. In early November, the Health and Human Services Department reported that just 8,000 people had enrolled. Department officials refused to provide an update, although they collect such figures monthly, because they have decided to report them quarterly.

“Like the rest of the country, we thought we’d have pretty much a stampede. That obviously hasn’t materialized," said Michael Keough, executive director of North Carolina’s plan. With nearly 700 participants, it is among the nation’s largest so far, but it has one-third of the people expected by now.

According to interviews with administrators of nine of the state-run plans, only one — Colorado’s — is close to its forecast enrollment. Maryland has 97 participants, compared with 1,900 in an older state high-risk pool, said Kent McKinney, who directs both. A November government report said Virginia had 75 participants in the federal plan. The District of Columbia had none.

Health and Human Services has made some changes for 2011 in the federal plan on which 27 states are relying. It will have somewhat lower premiums and two new options with varying deductibles, said Richard Popper, the department’s deputy director for insurance programs.

The agency is also launching a more aggressive marketing campaign, Popper said, focused on states, including Virginia, whose residents have not had any kind of high-risk pool in the past. And the Social Security Administration has agreed to tell everyone it approves for disability benefits about the new health plans.

Among the 23 states with their own plans, 17 have submitted changes for HHS to approve so they can lower premiums, adjust other costs, or alter who is allowed to join. And they are doing more marketing. Michigan is running Internet ads through Google. North Carolina is advertising on billboards and on cable television.

The law contains rules to make the high-risk pools more affordable than older ones that many states have run; the new ones cannot charge more in premiums than the average premium for other individual insurance in a given state. But “the individual market is expensive,’’ said Jean P. Hall, a University of Kansas researcher. “From my perspective, it is not a good match for people who have expensive conditions."

Whether the marketing and plan adjustments will translate into more customers is unclear. For now, Cecil Bykerk, executive director for the new plans in Montana, Iowa, and Alaska, said some people are wary of whether the health-care law will last.

Montana is one of a few states in which the medical bills from those who have joined are huge. New Hampshire’s plan has only about 80 members, but they already have spent nearly double the $650,000 the state was allotted in federal money to help run the program, said J. Michael Degnan, its director. The spending, he speculated, might slow if it turns out the early bills reflected a burst of pent-up need for care. HHS agreed to give New Hampshire more money, he added.

© Copyright 2010 Globe Newspaper Company.