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High-Risk Pools: What We Know

As high-risk pools are front and center in the debate today around the repeal of the Affordable Care Act (ACA), the California Health Care Foundation has pulled together resources from credible sources on the topic and highlighted key takeaways.

The False Equivalency of High-Risk Pools to Replace the ACA (Insure the Uninsured Project)

This new analysis looked at California's experience with high-risk pools pre-ACA and found that:

  • From its start in 1991, California's Major Risk Medical Insurance Program (MRMIP) was plagued by long waiting lists, exorbitant premiums, low annual and lifetime benefit caps, coverage exclusions for preexisting conditions, and limited participation of health insurance carriers.
  • In 2001, more than 7,000 Californians lingered on the MRMIP waiting list, which was made necessary because of capped state funding and high demand.
  • At its high point in 1998, MRMIP served nearly 22,000 people — far less than the estimated 360,000 Californians that may have been eligible for MRMIP coverage.

"Returning to high-risk pools as separate coverage programs for those with preexisting health conditions would be a dramatic step backward, as California's history demonstrates."

House Health Care Plan Is Not Enough to Keep High-Risk Pools Afloat (Center for American Progress)

An analysis of the April 26, 2017, American Health Care Act (AHCA) found that the bill's funding for high-risk pools would result in a shortfall of $2.5 billion in California alone — and almost $20 billion nationwide. These shortfall figures may be low: They assume a fairly small high-risk pool and also assume $130 billion over 10 years is devoted to the pool, including funds currently earmarked in the AHCA for other purposes.

A follow-up analysis by CAP, The Upton Amendment to the ACA Repeal Bill Will Have Almost No Effect (released May 3), includes the additional $8 billion added to the AHCA to further support high-risk pools over five years. It finds that the California shortfall remained $2.3 billion — and approximately $18 billion nationwide.

High-Risk Pools for People with Preexisting Conditions: A Refresher Course (Commonwealth Fund)

This national analysis of high-risk pools pre-ACA found that:

  • Premiums ranged from 125% to 200% of average premiums in the individual market, yet covered only about 53% of claims and administrative costs nationally (Wisconsin allowed premiums up to 200% of average).
  • Fourteen states had plans with deductibles of $10,000 per year or higher, substantially greater than the current maximum $7,150 deductible for catastrophic plans in the marketplaces.
  • Thirty states imposed maximum lifetime limits; others had annual coverage limits as low as $75,000 per year (Utah had both a lifetime and an annual limit).
  • In 2010, the 35 state high-risk pools incurred about $2.4 billion in total costs — to cover just 221,879 people.

"The reality is that high-risk pool coverage was prohibitively expensive, and there is little evidence to suggest that the existence of such pools made coverage less costly for others in the individual insurance market."

Resources from the Kaiser Family Foundation (KFF)

KFF provides a range of resources on high-risk pools, as well as preexisting conditions and underwriting in the pre-ACA market and denial rates prior to the ACA.

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916.329.4542

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