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Kansas City, MO – For the many people who have pre-existing conditions and struggle to get health coverage, some relief is supposed to come today. July 1st marks the U.S. Department of Health and Human Services' start-date for new high risk insurance pools. But in Kansas, like many other states (including Missouri), the pool isn't ready yet. And once it is up and running, it's still going to be quite limited. Kansas Insurance Commissioner Sandy Praeger recently spoke with KCUR's Elana Gordon about the situation and what's accounting for the delay.
PRAEGER: Part of the problem is we submitted the application and then we had to wait to get feedback from them [HHS]. So we just got final decisions on what the contract with HHS to get the grant needs to look like. So, we'll get it [the new pool] up and running just as quickly as we can. I mean, it's not going to be a heavy lift because we're using the existing high risk pool benefit manager to run this high risk pool.
GORDON: Who is eligible, though? I mean, what is the role of a high risk pool?
PRAEGER: The high risk pool is designed - our current high risk pool and this new one - is designed for people in the individual market who've been denied coverage or offered coverage at such an expense that it's considered unaffordable. And the idea is to get that coverage to them during this interim period before the exclusion on pre-existing condition kicks in in 2014. So the need for high risk pools will go away in 2014 when health plans have to accept everybody and they can't medically underwrite them because of a health condition.
GORDON: The state already has a high risk pool. What is the difference between that and this [new one]?
PRAEGER: The existing high risk pool does not have limitations on out-of-pocket expense and the new one will. And that means the new one will not be as expensive as the existing one - which is going to be a problem to try to explain to folks [in the existing pool] that they can't be eligible for the new one. The law doesn't allow us to merge the two. We have to keep the funds separate. And the existing pool enrollees - that's considered credible coverage. So they'd have to be without insurance for six months to be eligible for the new pool.
GORDON: So what you're saying is, people who are in the current pool aren't eligible for the new pool?
PRAEGER: That's correct. And they'll have to continue paying higher out-of-pocket expense than folks that will be eligible in the new pool. And, you know, they're going to argue that it's unfair. And I would agree with them. But it was the intent of the law that it [the new pool] would be for new people. It was to try to get new people in.
GORDON: Are there a lot of Kansans that are in that situation where they have a pre-existing condition and it's difficult to get insurance?
PRAEGER: We have somewhere between 1600 and 1800 - it fluctuates but it's been fairly constant - in our existing high risk pool. We've been allocated $36 million to cover the cost of the new high risk pool. And so HHS has estimated, based probably on our current enrollment, that this is potentially enough money to cover those folks that are out there. But it's hard to know exactly.
GORDON: There was a recent Families USA Report that estimated about one in four Kansans do have a pre-existing condition.
PRAEGER: Yes, right.
GORDON: So, in theory, what kind of capacity is there in this new type of pool if it is cheaper, and people perhaps may not have enrolled in the current high risk pool because of those expenses? What if a lot of people apply?
PRAEGER: Well, that's a concern. And, we're going to limit enrollment on a month-to-month basis of 25 new enrollees a month - just to manage and make sure that we don't just have a flood of enrollees early on that essentially ties up the money and then we have to essentially shut it off.
GORDON: So, if 30 people were to apply this month, is it kind of a first come first serve? How do you prioritize?
PRAEGER: Yeah, it'll partly be based on first come first serve. We've also put in place some presumptive eligibility guidelines. Meaning that if somebody applies that's had a heart attack, cancer, you know, diabetes - there's a list of I think about thirty-something conditions - those people would get priority over somebody with a less serious and less expensive health condition. People are eligible for this high risk pool if they've been offered coverage at just 100% of the average in the market place, unlike our existing high risk pool where it's about 128%. The idea is that when you go out in the market and you're quoted a price, we have a threshold that says if that price in the market goes over a certain amount - so you're offered a more expensive premium than the average person in the market place - than that's an eligibility threshold. And that average cost in the market is less in this new pool than it is for our existing pool. So, there is going to be more demand.
GORDON: But there's going to be limited space.
PRAEGER: But there's limited space, limited dollars. That's right.
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