High-risk pool funds nearly exhausted

January 27, 2012

Temporary program slated to run until 2014

One of the key provisions of health care reform is to ensure that patients with pre-existing health conditions cannot be denied health insurance. Until the Health Insurance Exchanges open up in 2014, these individuals can participate in a temporary “bridge” form of coverage through high-risk pools.

However, due to the high cost of medical care for those enrolled in the pools, nearly one quarter of states are running short of money and nine states have requested additional funds, according to the federal government.¹

The government has already granted two of the requests for additional funding:²

• California, which started with $761 million for its high-risk pool, was granted an additional $118 million by the Department of Health and Human Services.
• New Hampshire, which started with $20 million, was granted another $30 million.

Funding requests are pending for:³

• Alaska
• Montana
• New Mexico
• Oregon
• South Dakota
• Utah

Colorado records show the state’s high-risk pool is spending an average of $22,500 on care for each of its high risk pool patients. Claims submitted by 964 patients total $21.7 million.⁴

The health care reform law originally earmarked a total of $5 billion for the high-risk pools. However, the Congressional Budget Office projected in 2010 that the amount would have to be increased if Congress did not limit the number of enrollees.⁵

Impact on employees and individuals:

• If funds are exhausted prior to 2014, individuals with pre-existing health conditions won’t have access to this temporary “bridge” coverage.

Impact on employers:

• Although no direct impact, employers who do not offer group health insurance should be aware that their most vulnerable workers who are eligible for the high-risk pools could be losing access to this key insurance for a period of time until 2014.