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High-Risk Pool Proponents Urge Fiscal 2007 Funding

By Mary Agnes Carey, CQ HealthBeat Associate Editor

November 15, 2006 -- Federal funding for state-run high-risk pools that provide health insurance to thousands of Americans is in jeopardy for fiscal 2007 unless lawmakers act before adjourning for the year, insurers said Wednesday.

In February, President Bush signed into law legislation (PL 109-172) that reauthorized grants to state-run health insurance pools for medically high-risk individuals who have had difficulty finding coverage elsewhere. The bill provided $75 million in fiscal 2006 in grants and $15 million in seed money for states that wanted to start high-risk pools.

While that measure provided money to help fund the existing 33 state high-risk pools and to help create new ones in other states, no legislation has passed so far to continue funding for fiscal 2007.

"It's just fallen through the cracks . . . We just need folks to press people in leadership and on the Appropriations committees" to take action, said Laura Trueman, executive director of the Coalition For Affordable Health Coverage, an alliance of insurance, health care, and business groups supporting market-based solutions to help reduce the number of the uninsured.

State high-risk pools often operate at a significant loss and federal funding helps offset those costs and reduce premiums for people who get health insurance coverage through the pools, speakers said at a news conference Wednesday.

Proponents of the pools also said members of both parties should support federal funding as a way to help reduce the number of uninsured Americans. "This federal funding is critical, and it is helping people stay insured," said Steve Browning, executive director of the Texas Health Insurance Risk Pool, which covers 28,100 state residents.

While the monthly premiums, deductibles, and copayments for coverage in high-risk pools often cost more than those found in traditional employer-sponsored coverage, state laws generally cap risk pool rates between 125–150 percent of the base individual market rate. The coverage offered by the pools, however, is still more affordable than health insurance coverage that high-risk individuals could purchase on their own, if they could find it, speakers said. Pre-existing medical conditions might prevent an insurer from offering coverage at all to an individual or family, while state high-risk pools might impose waiting periods before coverage begins.

A Maryland man who asked not to be identified said that when he left his last job, the only health care coverage he could purchase for himself and his family would have cost more than $2,000 a month—and might not have been complete—because one of his two children has a serious health issue. In the Maryland high-risk pool, he pays $690 a month for family coverage, with a $1,000 deductible and 20 percent copay, with an additional $500 deductible for prescription coverage.

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