First steps toward the Federal High Risk Pool…

Many advocates and industry representatives attended the public board meeting of the Managed Risk Medical Insurance Board yesterday as they debated and discussed what one important new feature of the federal health care reform legislation would look like. And we have tentative details, some of which were reported in the Sacramento Bee by Carrie Peyton Dahlberg.

Although California has had a high risk pool for many years, it has not provided much of an alternative for people who could not purchase health insurance. That is because the California pool was expensive to enroll in, would only permit enrollment of 7,100 Californians (out of estimates of California’s “uninsurable” population of as many as 300,000 people), and had annual limit of $75,000 that could be paid for benefits per enrollee per year. Considering that Californians who wanted to enroll in the high risk pool had not been able to buy insurance, often because they had a pre-existing condition, it would be very easy to spend the annual cap on payments to pay for treatment of many chronic, but serious conditions or any acute episode of care that involved specialists and lengthy hospitalizations.

That’s why there has been such interest in finding out the new rules under federal health care reform for the federal high risk pool. In addition, this program would be one part of the transition to the health care reform measures that start in 2014, such as the exchange where individuals and small businesses can purchase good health care coverage at competitive prices. There are lots of questions to be answered and the federal rules for the states have yet to be issued (and even the authority for California to operate a federal high risk pool is pending in the legislature.)

However, at the public meeting yesterday, the California approach became clearer. The Managed Risk Medical Insurance Board (who also administer the California Healthy Families Program for low income children) considered alternative approaches and the details of what the plan would look like. Here’s what they settled on from among nine options: their initial decision was a choice to offer a plan that has a $1500 calendar year deductible with the enrollee required to pay for 15% of covered charges as co-insurance. There would be an out-of-pocket limit each year of $2500 that the consumer had to pay. But there would be no annual or lifetime benefit limits.

And here’s the good part: they took a typical consumer who lives in San Francisco who belongs to California’s high risk pool to compare pricing. That hypthetical person now pays $915 a month for pretty limited insurance in the high risk pool; when this starts under the federal rules (expected to be late summer, early fall this year) they would pay $575 a month. That means a reduction of $340 less per month for better benefits. While there would be better coverage at a lower cost, the amount of money set aside for this program would cover many more people–although not everyone who would be eligible in the state. But it’s be some good steps foward.

Everyone should stay tuned as details emerge and the authority is granted by the legislature for this program to start. It’s a good first step for all Californians!

Health Access California promotes quality, affordable health care for all Californians.

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