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Coverage of Uninsurable Pre-existing Conditions: State and Federal High-Risk Pools
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NCSL Resources
NCSL Contact
Federal Health Law and the Supreme Court
On June 28, 2012, the Supreme Court issued an opinion upholding the Patient Protection and Affordable Care Act, with limitations on penalties for states that choose not to expand their Medicaid programs. The decision did not affect other provisions. The information on this web page continues to reflect state actions addressing the PPACA.
For NCSL’s updated summary and analysis of the Court’s decision and its effects see: U.S. Supreme Court and Federal Health Law
 Updated: February 2013
Includes latest material on implementing health reform: The Pre-existing Condition Insurance Plan (PCIP)
To aid uninsurable individuals, 35 states implemented high-risk health insurance pools over three decades. The Federal health reform law of 2010 provides $5 billion among all 50 states, for newly created or add-on expanded programs run by states or by a designated insurer, if states choose those options. 27 states had done so by fall 2010. 23 states deferred to the federal government to handle the new programs.
For millions of Americans with a pre-existing medical condition, health insurance can be an unattainable goal. In the absence of laws requiring insurers to provide individual coverage to people with pre-existing conditions, many of these people joined the ranks of the uninsured. These uninsurable individuals have sought coverage, but have been unable to purchase it because they have been rejected or because they have been offered coverage only at unaffordable, high premium rates. Because of their often complex or costly health conditions, uninsurable individuals are the segment of the larger uninsured population that most needs health insurance coverage.
In response to the problems of uninsurable individuals, 35 states set up high-risk health insurance pools over a 25 year span, from 1976 to 2009. Across these 35 states, the national enrollment was 221,879 by December 31, 2010. This compared to 200,047 as of December 2007. This is about 1.8 percent of the individual market enrollment, but is up to 25 percent of the individual market documented to be subject to denials or "adverse underwriting" restrictions due to pre-existing medical conditions.
 CMS Pre-Existing Insurance Plan Annual Report: Covering People With Pre-Existing Conditions, Report on the Implementation and Operation of the Pre-Existing Condition Insurance Plan Program - January 31, 2013
UPDATE: "Beginning February 16, 2013, the federally-run Pre-Existing Condition Insurance Plan (PCIP) is suspending acceptance of new enrollment applications until further notice. State-based PCIPs may continue accepting enrollment applications through March 2, and will then suspend acceptance of new enrollment applications until further notice. PCIP will continue providing coverage to more than 100,000 people currently enrolled nationwide."
Source: http://www.healthcare.gov/law/features/choices/pre-existing-condition-insurance-plan/index.html
FEDERAL HEALTH REFORM - THE PATIENT PROTECTION AND AFFORDABLE CARE ACT INSURANCE REFORMS: KEY PROVISIONS THAT TAKE EFFECT IMMEDIATELY
Section 1101: ESTABLISHES AN INTERIM HIGH-RISK POOL PROGRAM
Provides immediate access to insurance for Americans who are uninsured because of a pre-existing condition.
Establishes a temporary national high-risk pool to provide health coverage to individuals with pre-existing medical conditions.
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U.S. citizens and legal immigrants who have a pre-existing medical condition and who have been uninsured for at least six months will be eligible to enroll in the high-risk pool and receive subsidized premiums.
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Premiums for the pool will be established based on a standard population and may vary by no more than a 4 to 1 ratio due to age.
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The law appropriates $5 billion to finance the program.
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The new pools are to be administered directly by a state or a nonprofit entity under contract. States may not reduce their current high risk pool efforts.
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CMS has estimated that about 375,000 people may be eligible to sign up for the federally-funded high risk pools.
Premiums in the new federal pool are designed to be 10 percent to 50 percent lower than current state rates. Co-payments and deductibles are also expected to be considerably lower. Current beneficiaries in state high-risk pools could get the federal coverage only if they drop out of their state pool and remain uninsured for six months.
The high risk pool provision of the federal law became effective 90 days after enactment, June 21, 2010. Individual policies are offered for sale after July 1, 2010; the federal program remains legally in effect until January 1, 2014.1
STATE BY STATE SUMMARY OF FEDERAL AND STATE HIGH RISK POOLS - TABLE 1
KEY
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= State Administered PCIP, 2010-11
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= Federally Administered PCIP, 2010-12
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X = No state-based pool
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FEDERALLY FUNDED PCIP PROGRAM
Established by The Affordable Care Act
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STATE-FUNDED
HIGH RISK POOLS [i]
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State
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State Runs
Federal Pool?
(as of June 2012)
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Date Coverage Began
(in 2010)
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# Enrolled as of
Dec. 31, 2011 |
# Enrolled as of October 31, 2012
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Federal Fund
Allocation
$ millions
(2010-13)
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State-Only
High Risk Pool
Enrollment
(12/31/2010)
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Year State Began
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Annual Total Expenses
$ millions (2010)
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Alabama
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NO
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8/1/2010
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340 |
735 |
$69
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2,139
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1998
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$21.1
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Alaska
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YES
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9/1/2010
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44 |
42 |
$13
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524
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1993
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$11.7
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Arizona
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NO
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8/1/2010
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1,783 |
4149 |
$129
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X
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Arkansas
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YES
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9/1/2010
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404 |
798 |
$46
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2,865
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1996
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$26.6
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California
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YES
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10/25/2010
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5,599 |
13584 |
$761
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6,953
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1991
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$61.1
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Colorado
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YES
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9/1/2010
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1,054 |
1330 |
$90
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**12,732
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1991
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$120.8
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Connecticut
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YES
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9/1/2010
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163 |
567 |
$50
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1,870
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1976
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$33.3
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Delaware
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NO
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8/1/2010
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153 |
268 |
$13
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X
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Florida
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NO
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8/1/2010
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3,736 |
9299 |
$351
|
235
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1983
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$2.9
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Georgia
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NO
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8/1/2010
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1,476
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3260 |
$177
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X
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Hawaii
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NO
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8/1/2010
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78 |
135 |
$16
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X
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Idaho
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NO
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8/1/2010
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316 |
714 |
$24
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1,565
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2001
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$11.5
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Illinois
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YES
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9/1/2010
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1,962 |
3077 |
$196
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18,098
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1989
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$193.7
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Indiana
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NO
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8/1/2010
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678 |
1649 |
$93
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7,327
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1982
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$125.3
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Iowa
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YES
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9/1/2010
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238 |
356 |
$35
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3,154
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1987
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$35.9
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Kansas
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YES
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8/1/2010
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301 |
495 |
$36
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1,671
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1993
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$26.8
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Kentucky
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NO
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8/1/2010
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435 |
1178 |
$63
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4,837
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2001
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$64.2
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Louisiana
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NO
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8/1/2010
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377 |
1284 |
$71
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1,639
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1992
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$17.1
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Maine
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YES
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8/1/2010
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30 |
44 |
$17
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X
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Maryland
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YES
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9/1/2010
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741 |
1216 |
$85
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19,944
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2003
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$179.9
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Massachusetts *
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NO
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8/1/2010
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5 |
14 |
$77
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X
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Michigan
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YES
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10/1/2010
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789
|
1922 |
$141
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X
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Minnesota
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NO
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8/1/2010
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244
|
703 |
$68
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27,073
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1976
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$273.6
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Mississippi
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NO
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8/1/2010
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163
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338 |
$47
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3,514
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1992 +Exch.
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$31.2
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Missouri
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YES
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8/15/2010
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1,031
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1957 |
$81
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4,046
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1991
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$43.2
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Montana
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YES
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8/1/2010
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280
|
346 |
$16
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2,953
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1987
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$24.8
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Nebraska
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NO
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8/1/2010
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174
|
364 |
$23
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4,570
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1986
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$54.3
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Nevada
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NO
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8/1/2010
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579
|
1210 |
$61
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X
|
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New Hampshire
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YES
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7/1/2010
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306
|
627 |
$20
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1,573
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2002
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$13.7
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New Jersey
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YES
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8/15/2010
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794
|
1268 |
$141
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X
|
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New Mexico
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YES
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8/1/2010
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805
|
1341 |
$37
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8,429
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1988
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$110.8
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New York
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YES
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10/1/2010
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2,632
|
4316 |
$297
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X
|
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North Carolina
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YES
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8/1/2010
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** 2,889
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5002 |
$145
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4,846
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2009
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$26.4
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North Dakota
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NO
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8/1/2010
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32
|
80 |
$8
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1,462
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1982
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$12.4
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Ohio
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YES
|
9/1/2010
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2,137
|
3206 |
$152
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X
|
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Oklahoma
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YES
|
9/1/2010
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576
|
891 |
$60
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2,175
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1996
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$29.1
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Oregon
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YES
|
8/1/2010
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1,187
|
1494 |
$66
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13,618
|
1990
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$174.2
|
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Pennsylvania
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YES
|
10/1/2010
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4,567
|
6439 |
$160
|
X
|
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Rhode Island
|
YES
|
9/15/2010
|
136
|
154 |
$13
|
X
|
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South Carolina
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NO
|
8/1/2010
|
948
|
1775 |
$74
|
2,256
|
1990
|
$31
|
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South Dakota
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YES
|
7/15/2010
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153
|
185 |
$11
|
645
|
2003
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$6.6
|
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Tennessee
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NO
|
8/1/2010
|
878
|
1677 |
$97
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3,973
|
2007
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$42.7
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Texas
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NO
|
8/1/2010
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4,029
|
9139 |
$493
|
26,431
|
1998
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$316.7
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Utah
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YES
|
9/1/2010
|
696
|
1231 |
$40
|
4,158
|
1991
|
$35
|
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Vermont *
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NO
|
9/1/2010
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0
|
1 |
$8
|
X |
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Virginia
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NO
|
8/1/2010
|
982
|
2294 |
$113
|
X
|
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Washington
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YES
|
9/1/2010
|
708
|
947 |
$102
|
3,923
|
1988
|
$82.2
|
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West Virginia
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NO
|
9/1/2010
|
76
|
159 |
$27
|
884
|
2005
|
$4.7
|
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Wisconsin
|
YES
|
8/1/2010
|
1,000
|
1872 |
$73
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18,965
|
1981
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$162.8
|
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Wyoming
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NO
|
8/1/2010
|
137
|
257 |
$8
|
829
|
1991
|
$9.8
|
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D.C.
|
NO
|
10/1/2010
|
38
|
69 |
$9
|
X
|
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Nationwide
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Yes = 27
|
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Total 48,879
Dec. 31, 2011
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Total 94,458
October 31, 2012
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$5,000
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221,879
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$2,418.4
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Total # enrolled as of Feb. 29, 2012 was 56,257
Total # enrolled as of March 31, 2011 was 18,313
Total # enrolled as of November 1, 2010 was 7,986
* Massachusetts and Vermont are guaranteed issue states that have already implemented many of the broader market reforms included in the Affordable Care Act
[i] National Association of State Comprehensive Health Insurance Plans (NASCHIP). “About High Risk Pools” www.naschip.org
RESOURCES FOR TRANSITION TO FEDERAL HIGH RISK POOLS
PCIP reports shows risk pools won't work on larger scale
A Commonwealth Fund report released September 13, 2012 found that The health reform law’s high-risk insurance pools (PCIP), one of the first pieces of the law to be enacted, are operating at a loss and prohibitively expensive — but they also provide needed coverage to a small group of people, according to a new report out Thursday. According to the report, the Pre-Existing Condition Insurance Plans are providing a solid “bridge” to extend insurance coverage until the health insurance exchanges and other pieces of the law are set up in 2014. But the report’s authors warn that Republican proposals to set up more widespread high-risk pools would not work. “Using high-risk pools as an alternative to the provisions in the Affordable Care Act to cover the substantial remaining uninsured population with preexisting conditions would be extremely expensive and likely unsustainable,” according to the report’s authors, Jean P. Hall and Janice M. Moore. “Both the PCIP and state high-risk pool cost experiences illustrate the inadvisability of extending this form of coverage to a large number of people.” (Includes material adopted from Politico,9/13/12)
New Plan Options for Federally Administered Pre-Existing Condition Insurance Plan in 2011
On November 5, 2010, the Department of Health and Human Services (HHS) announced new plan choices for people enrolling in the Pre-Existing Condition Insurance Plan (PCIP) for 2011. These options will give current and future enrollees a greater number of coverage choices and allow people to select the plan that best meets their needs. The new options will be offered in a three-tiered structure beginning January 1, 2011, and will be available in States where the program is federally administered through the Office of Personnel Management. These choices build on the current single plan option: experience with the program has provided valuable information that has allowed for the creation of new and improved options. The federally administered program is available in 23 States and the District of Columbia.
PCIP provides Americans living with such conditions as cancer, diabetes, or heart disease to obtain insurance coverage. The program covers a broad range of health benefits and is designed as a bridge for people with pre-existing conditions who cannot obtain health insurance coverage in today’s private insurance market. In 2014, all Americans – regardless of their health status – will have access to affordable coverage either through their employer or through a new competitive marketplace, and insurers will be prohibited from denying coverage to anyone based on the state of their health. For more information about eligibility and benefits please visit www.pcip.gov.
Expanded Plan Options in 2011
In 2010, people enrolled in the federally-administered PCIP program were offered one plan. Beginning in 2011, such enrollees in the federally administered PCIP program will be able to choose between three plan options: the Standard Plan, the Extended Plan and the Health Savings Account eligible plan. In addition, families will be able to enroll their eligible children in PCIP at child-only rates. These options will allow enrollees to select a plan that best meets their needs.
2011 Standard Plan. The existing option in PCIP has been made more flexible. The 2010 Standard Plan had a single, combined medical and pharmacy deductible of $2,500. The 2011 Standard Plan now has two separate deductibles -- a $2,000 medical deductible and $500 drug deductible, while also offering premiums that are almost 20% lower than the 2010 premiums. The reduced pharmacy deductible is particularly beneficial for people who take one or more maintenance medications. The lower premiums result from experience and are expected to be more affordable for the eligible population with pre-existing conditions.
2011 Extended Plan. A new plan option, called the Extended Plan, has a $1,000 medical deductible and $250 drug deductible plan. The premiums for the 2011 Extended Plan will be slightly higher than 2010 premium levels. Just as with the Standard Plan, separating the drug and medical deductibles makes this plan option more valuable for those enrollees who take one or more maintenance medications.
Health Savings Account Option. The Health Savings Account (HSA) Option will carry a $2,500 deductible but with premiums that are 16% less than 2010 premiums. As with the current plan, this option is eligible to receive favorable tax treatment by the federal government when used with a Health Savings Account (HSA).
Child-Only Rate. To ensure that children have more affordable access to coverage, HHS has established premiums targeted for covering children under PCIP, creating a child-only rate for PCIP enrollees between 0-18 years of age.
Extra Funds for States Sought - January 2012
For the first 16 months of operation (Sept, 2010 to December 2011) 42,000 new individuals enrolled, with resulting expenditures of less than $500 million. However, newly signed-up severely ill patients and different state-specific situations are leading to allocating funds not just according to the original population estimates.
As of January 8, 2012 nine states asked the federal government for more money to assure their new high-risk pools don’t run out of money before 2014.
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Two of the states — California and New Hampshire have been granted additional federal funds.
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Seven other states have requests pending with CCIIO at HHS, They are Alaska, Colorado, Montana, New Mexico, Oregon, South Dakota and Utah.
STATE HIGH-RISK POOL PROGRAMS
Table data sources: Karen L. Pollitz, Project Director, Health Policy Institute, Georgetown University, Washington, DC; NASCHIP: " States with Pools"
SOURCES AND RESOURCES
Author: Richard Cauchi, Program Director, NCSL Health Program, Denver, Colorado
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