National Institute for Health Care Reform
May 27, 2010
Health Coverage for the High-Risk Uninsured: Policy Options for Design of the Temporary High-Risk Pool
By Mark Merlis
Among the first tasks required by the recently enacted health reform law is creation of a temporary national high-risk pool program to provide subsidized health coverage to people who are uninsured because of pre-existing medical conditions. While as many as 5.6-million to 7-million Americans may qualify for the program, the $5 billion allocated over four years will allow coverage of only a small fraction of those in need, potentially as few as 200,000 people a year. Policy makers will need to tailor eligibility rules, benefits and premiums to stretch the dollars as far as possible. Another consideration is how the new pool will fit with existing state high-risk pools or other state interventions in the private nongroup, or individual, health insurance market. Policy makers also will need to consider how to manage the transition of enrollees from high-risk pools to the new health insurance exchanges scheduled to be operational in 2014 to prevent adverse selection and encourage insurer participation.
Comment: The Patient Protection and Affordable Care Act (PPACA) allocates $5 billion over four years for a temporary high-risk pool to insure those individuals who have problems obtaining coverage because of preexisting conditions. Although about 7 million Americans fall into this category, this report indicates that only about 200,000 people will be covered by this program, thereby meeting only about 3 percent of the need.
You need to read the full 14 page report to understand the multitude of policy interactions that will result in the failure of this one program. It serves as a proxy for the multitude of other policies contained in PPACA. We haven't seen anything yet.
This is what happens when members of Congress insist on building health care reform on our dysfunctional, inefficient, highly fragmented system of health care financing. By insisting that we give first priority to protecting and enhancing the role of private insurers, the policy compromises have resulted in a system that will cost more while leaving far too many with inadequate coverage or no coverage at all.
Again, it doesn't have to be this way. We can still enact a single payer national health program, ensuring all essential health care for everyone.