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High-Risk Pool Directors Ask Outside Groups to Help Pay Patients' Premiums

By Rebecca Adams, CQ HealthBeat Associate Editor

October 25, 2010 -- State officials charged under the new health law with providing affordable insurance to people with preexisting medical conditions are trying to stretch the federal dollars available for that growing need by asking outside groups to help pay the tab.

These state health specialists are tapping unconventional funding sources to help people afford the high-risk-pool premiums. They're turning to a variety of sources—from local medical providers, such as hospitals and national charities such as the American Kidney Fund—in order to cover as many people as possible.

"You will see some creativity in the benefit and premium structure to make sure it's accessible," said Vernita Bridges-McMurtrey, the Missouri high-risk-pool director and the past chairwoman of the National Association of State Comprehensive Health Insurance Plans (NASCHIP). "I'm encouraging states to do what you can do in reaching the people who need this pool. It doesn't really require a change in the law."

This year, every state has been required by the new health care legislation (PL 111-148, 111-152) to create a separate Pre-Existing Condition Insurance Program funded by federal dollars. State officials can elect to run the pools themselves or allow the same company that runs the Federal Employment Health Benefits Program to operate them.

About 35 states already had high-risk pools that offer coverage to people whose preexisting medical conditions make it hard for them to find affordable insurance. In a handful of those, outside groups have helped pay risk pool premiums. State officials hope to have some agreements with these third-party groups to help pay federal risk pool premiums in place by the start of the year.

Even though the new federal pools have somewhat lower premiums than the existing state ones, their premiums are still out of reach for some critically needy patients. So state officials have decided to adopt this tactic.

"This is in its infancy, so it's hard to know" how all of the details will work, said Amie Goldman, the Wisconsin high-risk-pool director and current NASCHIP chairwoman. "How each state thinks about this might be slightly different. But it's definitely something we're exploring here and I know a number of other states are investigating it as well."

Debbie Armstrong, the director of the New Mexico Medical Insurance Pool, said that her state's high-risk pool has received funding in recent years from other state-funded health programs, such as those that provide medical care for HIV-AIDS patients and hemophiliacs. The pool also receives premium assistance from the American Kidney Fund, a national organization based in Maryland.
"It definitely makes it more affordable for the individual," said Armstrong. "It's really critical for us to have it affordable. It makes a big difference."

The outside help allows the administrators of these pools to stretch limited dollars as far as possible. The state-run pools are funded by patients' premiums, assessments on health insurers and, in some areas, state government subsidies. The new pools are financed by $5 billion in federal funds through 2013—an amount that the Congressional Budget Office has said would "not be sufficient to cover the costs of all applicants."

That $5 billion in federal funding may last somewhat longer than anticipated, because many administrators are dismayed that enrollment has been lower than expected. Over the past few months, high-risk-pool directors have worked on plans to expand the marketing of the pools and connect more people who need help to the program.

Social and Political Goals
State directors want to cover as many patients as they can—for both altruistic and political reasons.

First, many officials see the expansion of the pools as a social policy goal. Until new state insurance exchange markets are operating in 2014, many sick people have few or no affordable options for medical coverage. If states can leverage payments from third-party groups such as charities to bring more people into the pool, they are fulfilling their social and fiscal responsibilities.

"It's an ethical and moral obligation," said Goldman. "Most of the pools have a mission to provide affordable, high-quality health care to eligible residents who have no other option."

From a more practical standpoint, state officials are nervous that if they don't spend all of their allocated funds, the federal government could hand that money to another state. So it is in their political interest to enroll as many people as possible and use up their federal allocation.

"No state likes to see their federal funding allocations go to other states," said Goldman. "There's always that tension. There is a lot of political pressure to say, for example, we don't want Iowa's allocation to go to Kentucky. It's a little less noble reason, but it's real."

So if turning to third parties increases public interest in and use of the new federally funded risk pools, state officials believe it will become easier to attract new applicants and bolster the state's image as aiding the uninsured.

Sources of Help
The partnership between pool administrators and local providers is beneficial to both, for several reasons.

The medical providers may be willing to pay for people who otherwise would not have insurance, because it is cheaper for a hospital or physicians' practice to shoulder part of the monthly premiums than it is for them to eat all of the costs of uncompensated medical care.

"If it's possible for health systems to help patients access insurance, it may be in their interest financially, rather than count it as charity care, and it certainly would be good for the individual," said Goldman.

In Wisconsin, high-risk pool officials are considering a range of third-party options. Goldman said that hospital foundations are an obvious source they would like to tap. State officials have some experience working with provider groups, shen said, noting that Medicaid officials had worked out an agreement to allow providers such as hospitals to pay an annual $60 enrollment fee for patients who wanted to sign up for Medicaid but cannot afford the fee.

The state is reaching out to Advocacy and Benefits Counseling for Health, a Wisconsin-based nonprofit public interest law firm that seeks to ensure health care access for families, and the Milwaukee Health Care Partnership, a group that connects health care providers, government agencies and community organizations, to try to get out the word about the state's interest in covering more patients.

National charitable organizations—especially those focused on particular diseases—are another potential source.

The American Kidney Fund has paid for the premiums of high-risk-pool patients in three states: New Mexico, South Carolina and Texas. The group pays for premiums through its Health Insurance Premium Program, one of three efforts that directly subsidize patients' care. Its other two programs pay for Medicare drug costs and for out-of-pocket costs such as transportation to dialysis treatment and over-the-counter medication.

Patients apply directly to the American Kidney Fund for the help. The group assisted about 50,000 dialysis patients through the Health Insurance Premium Program last year, although president and CEO LaVarne Burton said that only a small number got high-risk-pool premium assistance. The rest were covered by other public and private coverage programs.

But that appears likely to change, if a number of high-risk-pool directors encourage dialysis patients to apply for premium grants next year. Is Burton ready for an onslaught of interest?

"We certainly do want to support our patients in whatever way we can, because there's a great need," said Burton. "One of our major missions is to help them pay for their health care."

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