HHS to lower premiums for high-risk pools

The Department of Health and Human Services (HHS) announced new policies Tuesday designed to boost enrollment in newly created insurance pools for sick people, which have come under fire for their low enrollment.

HHS Secretary Kathleen Sebelius said the high-risk pools will drop their premiums, in some places by as much as 40 percent. HHS will no longer limit the pools to people who have been denied coverage from a private insurance company. 

The high-risk pools were designed to provide a temporary option for people who haven’t been able to get insurance because of a pre-existing condition. Insurance companies will be required to sell insurance to everyone beginning in 2014, regardless of their health status.

But in the face of initial enrollment figures that fell far short of expectations, HHS said Tuesday that enrollment in a high-risk pool will no longer require a rejection from a private company. The plans will now accept a note from a doctor saying the person has or has had a medical condition within the past year.

HHS runs high-risk pools in 23 states; the rest are state-based.

In addition to easing enrollment criteria, the department said it would lower premiums in 18 of those 23 states to bring them more in line with the average cost of an individual plan there. The high-risk pools’ low enrollment was attributed in part to the high cost of the plans — which, by design, cover only the most expensive patients.

Department officials said the federal government — not states — would pick up the extra costs after premiums decline. They could not provide an estimate of how much the changes will cost.

The high-risk pools received $5 billion in funding through the healthcare reform law. Both the program and its funding are scheduled to end in 2014.