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High Risk Pools for Health Coverage

Coverage of Uninsurable Pre-Existing Conditions: State and Federal High-Risk Pools

States Implement Heallth Reform NCSL bannerUpdated: April 2014
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. 

The Affordable Care Act (ACA) established a major new 3 1/2 year transitional program known as the Pre-Existing Condition Insurance Plan (PCIP), which launched in the summer of 2010.  Full PCIP operational details are provided in section 2, below.

A new report as of April 2014 lists the status of each of the 35 state high risk pools, and their plans regarding anticipated continuation of enrollment and coverage. [ 2014 Pool Enrollment Survey ] The chart groups the state pools into 2 categories: 17 states that will cancel coverage by early/mid-2014 and up to 18 that will continue to provide coverage in some capacity until a final decision is made.  The status table, based an surveys by NASCHIP, will be periodically updated.

From the federal prsepective, as of late 2013, 17 States (AR, CA, CO, IA, IL, KS, MI, MO, NH, NY, NC, OH, OR, SD, UT, WA) had begun the process of transitioning their state operated Pre-existing Condition Insurance Plans (PCIPs) to federally operated PCIPs, a process that is coordinated by HHS and CCIIO. These in turn were set to terminate in early 2014..Only 10 states (AK, CT, MD, ME, MT, NJ, NM, OK, RI, WI) continue to operate their own, state-based PCIP or high-risk pool.
 
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 226,615 by December 31, 2011. This compared to 200,047 as of December 2007.  This is about 1.9 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.
 
UPDATE:  For individuals that are losing coverage on April 30, 2014, through the Pre-Existing Condition Insurance Program, (PCIP) they are able to enroll into a health insurance plan under the Special Enrollment Period. Section 1101 of the Affordable Care Act establishes a “temporary high risk health insurance pool program” to provide health coverage to eligible uninsured individuals with pre-existing conditions. The program, carried out by the Centers for Medicare and Medicaid Services (CMS) directly in some states and through contracts in other states and known as the Pre-Existing Condition Insurance Program (PCIP), has provided coverage to these eligible individuals since 2010. Section 1101(g)(3)(B) authorizes the Secretary of HHS to develop procedures to provide for the transition of PCIP enrollees into qualified health plans offered through an Exchange (also called Health Insurance Marketplace). This section also requires the Secretary of HHS to develop procedures to ensure that there is no lapse in coverage for these enrollees, including extending coverage after plan termination if she determines that an extension is necessary to avoid such a lapse. While the majority of enrollees transitioned out of PCIP coverage on January 1, 2014, the Secretary determined that an extension of PCIP coverage was necessary to avoid a lapse in coverage for PCIP enrollees who, on January 1, 2014, were not yet enrolled in other coverage.  Thus, these individuals were offered transitional coverage beginning on January 1, 2014 and extending through April 30, 2014. 
> HHS PCIP Bulletin is available here and the PCIP Fact Sheet is available here - April 2014

Federal PCIP Coverage Extended through March 31, 2014.  The federall-run Pre-Existing Condition Insurance Plan (PCIP) will offer the option of two additional months of PCIP coverage to people currently enrolled in PCIP who have not yet found new health insurance coverage. This transitional coverage through March 31, 2014, will allow PCIP enrollees more time to review Marketplace plan options and enroll in the coverage that best meets their needs before open enrollment closes in March. They will be notified on www.pciplan.com and by mail of this option to extend their PCIP plan through March, along with details about cost-sharing. Eligible enrollees can purchase PCIP transitional coverage by sending in February and March premium payments; which will be the same monthly rate that they paid for January 2014. For question about benefits please go here.

On February 16, 2013, the federally-run Pre-Existing Condition Insurance Plan (PCIP) suspended acceptance of new enrollment applications until further notice. State-based PCIPs may continue accepting enrollment applications through March 2, 2013 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 AFFORDABLE CARE ACT INSURANCE REFORMS:

Section 1101: ESTABLISHES AN INTERIM HIGH-RISK POOL PROGRAM
Provided immediate access to insurance for Americans who are uninsured because of a pre-existing condition.
Established a temporary national high-risk pool to provide health coverage to individuals with pre-existing medical conditions.
  • 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.
  • 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.
  • The law appropriates $5 billion to finance the program.
  • 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.  
  • 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
 

Health Law Clock Is Ticking for Sickest Patients (Oct. 31, 2013)
(Associated Press) -- "Hundreds of thousands of people across the country with pre-existing chronic conditions such as cancer, heart failure or kidney disease who are covered through high risk-insurance pools will see their coverage dissolve by year's end. They are supposed to gain regular coverage under the Affordable Care Act, which requires insurers to cover those with severe medical problems. But many of them have had trouble signing up for health insurance through the exchanges and could find themselves without coverage in January if they don't meet a Dec. 15 deadline to enroll. Administration officials say the federal exchange, which covers more than half the states, won't be working probably until the end of November, leaving people just two weeks to sign up if they want coverage by Jan. 1.

'These individuals can't be without coverage for even a month,' said Tanya Case, the chairwoman of the National Association of State Comprehensive Health Insurance Plans, which represents the nation's high-risk pools. 'It's a matter of life or death.' High-risk pools were created by state legislatures to provide a safety net for people who have been denied or priced out of coverage. The Affordable Care Act will forbid insurers from turning away people in poor health. And while coverage can be purchased outside the exchanges, those who qualify for subsidies can only get them through a state or federal marketplace. More than a dozen of the 35 states that run insurance pools for people with serious medical issues will permanently close their pools within a month and half. Other states will keep their pools running for a few more months. The federal pool covers about 100,000 people and was created in 2010 by the Affordable Care Act as a temporary bridge until the law fully kicks in. It will cease to exist at the end of December."



Federally Funded PCIP Program Established by the Affordable Care Act

As of July 31, 2013, 104,966 individuals were covered by federally-funded PCIP programs; three months earlier, on April 30, 2013 there were a total of 110,298  -- state by state figures online.
 
State State Runs Federal Pool?
(as of July 2013)
Date Coverage Began
(in 2010)
 
  # Enrolled as of April 30, 2012 Federal Fund Allocation $ millions
(2010-13)
Alabama NO  8/1/2010   821 $69
Alaska YES 9/1/2010   51 $13
Arizona NO 8/1/2010   4779 $129
Arkansas NO 9/1/2010   895 $46
California NO 10/25/2010   16762  $761
Colorado NO 9/1/2010   1342  $90
Connecticut YES 9/1/2010   676  $50
Delaware NO 8/1/2010   306  $13
Florida NO 8/1/2010   10659  $351
Georgia NO 8/1/2010   3488  $177
Hawaii NO 8/1/2010   162  $16
Idaho NO 8/1/2010   754  $24
Illinois NO 9/1/2010   3638  $196
Indiana NO 8/1/2010   1891  $93
Iowa NO 9/1/2010   402  $35
Kansas NO 8/1/2010   513  $36
Kentucky NO 8/1/2010   1419  $63
Louisiana NO 8/1/2010   1551  $71
Maine NO 8/1/2010   66  $17
Maryland YES 9/1/2010   1664  $85
Massachusetts * NO 8/1/2010   21  $77
Michigan NO 10/1/2010   2389  $141
Minnesota NO 8/1/2010   846  $68
Mississippi NO 8/1/2010   415  $47
Missouri NO 8/15/2010   2309  $81
Montana YES 8/1/2010   353  $16
Nebraska NO 8/1/2010   423  $23
Nevada NO 8/1/2010   1300  $61
New Hampshire NO 7/1/2010   737  $20
New Jersey YES 8/15/2010   1520  $141
New Mexico YES 8/1/2010   1534  $37
New York NO 10/1/2010   5435  $297
North Carolina NO 8/1/2010   6245  $145
North Dakota  NO 8/1/2010   100  $8
Ohio NO 9/1/2010   3613  $152
Oklahoma YES 9/1/2010   1030  $60
Oregon NO 8/1/2010   1594  $66
Pennsylvania NO 10/1/2010   6960  $160
Rhode Island YES 9/15/2010   168  $13
South Carolina NO 8/1/2010   2050  $74
South Dakota NO 7/15/2010   195  $11
Tennessee NO 8/1/2010   1862  $97
Texas NO 8/1/2010   9125  $493
Utah NO 9/1/2010   1154  $40
Vermont * NO 9/1/2010   1  $8
Virginia  NO 8/1/2010   3015  $113
Washington NO 9/1/2010   1106  $102
West Virginia NO 9/1/2010   193  $27
Wisconsin YES 8/1/2010   2393  $73
Wyoming NO 8/1/2010   284  $8
D.C. NO 10/1/2010   89  $9
Nationwide Yes = 10   Total 48,879
Dec. 31, 2011 
Total 110,298
April 30, 2013
$5,000

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

 




State-Funded High Risk Pools 

NASCHIP has developed a chart [Click Here] that lists the status of each of the 35 state risk pools, and their plans regarding anticipated continuation of enrollment and coverage once the new insurance marketplace becomes available next year. The chart groups the state pools into 3 categories: those that plan to cancel coverage by early 2014; those that will continue to provide coverage in some capacity; and those that have not yet made a decision. The status table will be periodically updated as the state pools learn more about the marketplace. Some pools, for example, that now plan to end coverage in early 2014 may later elect to delay termination if the exchanges in their states are not yet fully operational.

The state risk pools, which have been in operation for many years, are totally separate from the federal PCIP (Pre-existing Condition Insurance Plan)
 

State State-Only High Risk Pool Enrollment (12/31/2010) Year State Began Annual Total Expenses $ millions (2010)
Alabama 2,139 1998 $21.1
Alaska 524 1993 $11.7
Arizona X
Arkansas 2,865 1996 $26.6
California 6,953 1991 $61.1
Colorado **12,732 1991 $120.8
Connecticut 1,870 1976 $33.3
Delaware X
Florida 235 1983 $2.9
Georgia X
Hawaii X
Idaho 1,565 2001 $11.5
Illinois 18,098 1989 $193.7
Indiana 7,327 1982 $125.3
Iowa 3,154 1987 $35.9
Kansas 1,671 1993 $26.8
Kentucky 4,837 2001 $64.2
Louisiana 1,639 1992 $17.1
Maine X
Maryland 19,944 2003 $179.9
Massachusetts * X
Michigan X
Minnesota 27,073 1976 $273.6
Mississippi 3,514 1992   +Exch. $31.2
Missouri 4,046 1991 $43.2
Montana 2,953 1987 $24.8
Nebraska 4,570 1986 $54.3
Nevada X
New Hampshire 1,573 2002 $13.7
New Jersey X
New Mexico 8,429 1988 $110.8
New York
North Carolina 4,846 2009 $26.4
North Dakota 1,462 1982 $12.4
Ohio X
Oklahoma 2,175 1996 $29.1
Oregon 13,618 1990 $174.2
Pennsylvania X
Rhode Island X
South Carolina 2,256 1990 $31
South Dakota 645 2003 $6.6
Tennessee 3,973 2007 $42.7
Texas 26,431 1998 $316.7
Utah 4,158 1991 $35
Vermont * X
Virginia X
Washington 3,923 1988 $82.2
West Virginia 884 2005  $4.7
Wisconsin 18,965 1981 $162.8
Wyoming 829 1991  $9.8
D.C. X
Nationwide 221,879   $2,418.4

 


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)
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.
  • Two of the states — California and New Hampshire have been granted additional federal funds.
  • Seven other states have requests pending with CCIIO at HHS,  They are Alaska, Colorado, Montana, New Mexico, Oregon, South Dakota and Utah.


SOURCES AND RESOURCES

Pool Membership (2011) [Click Here]
Rate Variable (2011) [Click Here]
Sources of Funding (2011) [Click Here]
CMS Grants (2011 and 2012) [Click Here]
Assessment Sources (2011) [Click Here]
Total Revenue by Pool (2011) [Click Here]
Total Expenses by Pool (2011) [Click Here]
Premium as a Percent of Pool Expense (2011) [Click Here]
Claims as a Percent of Premium (2011) [Click Here]
Distribution of Allowed Cost by Service Type (2011) [Click Here]
Distribution of Allowed Cost Payment Responsibility (2011) [Click Here]
Premium Rate Setting Methodology (2011) [Click Here]
Lifetime Maximums, Popular Plans, Premium Subsidy (2011) [Click Here]
HDHP/GSA Availability (2011) [Click Here]
HCTC and Medicare Eligible for Coverage in 2012 [Click Here]
Total Expenses by Pool - 2011 (PCIP) [Click Here]
Premium as a Percent of Premium by Pool - 2011 (PCIP) [Click Here]
Distribution of Allowed Cost by Service Type - 2011 (PCIP) [Click Here]
Distribution of Allowed Cost Payment Responsibility - 2011 (PCIP) [Click Here]
  • National Association of State Comprehensive Health Insurance Plans (NASCHIP) provides detailed information on the operational state programs. 2011, 2010, 2009  www.naschip.org.
  • Source: Data Tables from NASHIP website, accessed 4/1/2013

Author: Richard Cauchi, Program Director, NCSL Health Program, Denver, Colorado 

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