Thanks to ObamaCare, a high-risk health insurance pool is coming to a town near you very soon. Those, through no fault of their own, that cannot purchase health insurance because of a serious pre-existing condition will now be able to get coverage for the same price as everyone else. Sounds great. Why should a person be penalized for something that may have been out of their control, say cancer? They should not all would agree. https://higginscompanies.com/health-insurance/individual-health-insurance/
Here’s the problem with this new federal risk pool, or problems I should say. First, the federal money allotted for this program is very low, $5 billion through 2014. The program will run out of money before 2012, with estimated costs around $4 billion annually. But that’s not the biggest problem. Thirty-five states do not want the new federal program in their state because it will undercut their existing high-risk pool plans. With these health insurance plans a participant pays about one third more for coverage than standard rates. The state plans are funded by each state. The federal government health plan will compete with these established plans because the federal government says these states must keep their current high-risk pool insurance plans in place. The federal medical insurance plan will charge much less and offer much better coverage. The catch is that to qualify for the federal high-risk health insurance plan an applicant must be uninsured for at least six months. What will happen is that the healthier high-risk health insurance pool participants will drop their state medical insurance coverage for six months to qualify for the much cheaper and better benefits federal health insurance plan. This will leave those with the highest, most costly claims in the state pools, increasing their costs dramatically. It will be the states that must pay for the federal program once the money dries up, or roughly $11 billion short by 2014.
Once again there will be the haves and the have nots, another unfunded federal program each state must live with, and calls for more money no one has.
Michael Higgins
An Arizona health insurance broker.
602.405.8769