GOP governors opting out of health reform pool for high-risk uninsured

The decision whether to operate their own high-risk pool for sick people who can’t get insurance has become a highly politicized issue in some states, with a number of Republican governors blasting the $5 billion set aside for the provision as insufficient.

As of mid-day Friday, 21 states and the District of Columbia had decided to run their own pool while 11 states had opted to let the federal government take over. Of the latter, all have Republican administrations save for Tennessee and Wyoming.

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Conversely, all but five of the 21 states that opted to run their own pools are led by Democrats. The exceptions: Connecticut, Rhode Island, South Dakota, Vermont and California, where Arnold Schwarzenegger on Thursday became the first Republican governor to endorse the health reform law.

In an April 2 letter to governors and insurance commissioners, Health and Human Services (HHS) Secretary Kathleen Sebelius set an April 30 deadline for states to decide whether to run their own pool.

In states that choose not to run their own programs, the federal government will use their share to cover that state’s uninsured itself. HHS unveiled each state’s share of the $5 billion last week.

California would get the most, $761 million, while North Dakota, Vermont and Wyoming would each get $8 million. The high-risk pools are scheduled to begin operating July 1 and aim to cover sick people who can’t find insurance until 2014, at which point the comprehensive health coverage provisions kick in.

A number of state officials and health experts expect that the $5 billion will run out long before then, however, raising concerns that states that choose to run their own pool will be forced to foot the bill until 2014 once the money runs out. Rick Foster, the chief actuary for the Centers for Medicare and Medicaid Services, pointed out in an April 22 analysis of the health reform law that “by 2011 and 2012 the initial $5 billion in federal funding for this program would be exhausted, resulting in substantial premium increases to sustain the program; we anticipate that such increases would limit further participation.”

An insurance industry source told The Hill that health plans are also concerned that states that choose to run their own pools could raise taxes on insurance plans once they run out of money, potentially raising premiums for everyone.

The squabble over the high-risk pool has become particularly heated in Nevada, where Senate Majority Leader Harry Reid (D) has begun to run on his healthcare record just as Gov. Jim Gibbons (R) on Wednesday called the $61 million set aside for his state “grossly inadequate.”

While Gibbons told Sebelius that Nevada’s share would only cover 2,900 of the 100,000 or so Nevadans who may be eligible, Reid blasted Gibbons’ decision not to run a state pool.

Other Republican governors have also been vocally critical. In a letter sent to Sebelius Friday, Indiana Gov. Mitch Daniels (R) said he couldn’t allow “exposing Indiana taxpayers to an open-ended and potentially enormous new burden."

Meanwhile, Wyoming’s Democratic governor Dave Freudenthal opted for a more conciliatory tone in a letter he sent to Sebelius on Wednesday.

“I am aware that this allocation [of $8 million] is in addition to the premiums paid by enrollees to the program; however, I still worry that the allotted money may prove to be insufficient to fully operate this program until 2014.”

Other state officials have embraced the opportunity to run their own pools.

Asked about California’s commitment to running its own high-risk pool during a press conference Thursday, the state's Health and Human Services Secretary Kimberly Belshe called it a “great opportunity."

“We are confident,” Belshe said, “that working with the legislature and with stakeholders we can make this expanded high-risk pool a reality for Californians, tens of thousands who we think will be able to enroll as a result of these federally funded planning, administration and coverage dollars.”

At the federal level, some Democratic lawmakers have also drawn attention to the program and the money it means for their states.

Sen. Tom Harkin (D-Iowa) may have been the first lawmaker to tout the $35 million set aside for his state.

“Health reform will offer coverage to thousands of Iowans who, until now, have been locked out of the system,” Harkin said in an April 22 statement. “Having a pre-existing condition, whether it was a congenital heart problem, diabetes, or even arthritis, often meant that basic healthcare was out of reach"

He added, “Every American family should have access to the affordable, quality coverage they deserve and as these reforms take effect, we are moving towards that goal.”

Democratic Sens. Chris Dodd has also highlighted that the provision will benefit his state of Connecticut to the tune of $50 million.

Here’s the breakdown, as of mid-day Friday on states that intend to operate their own high-risk pool program:

Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Illinois
Kansas
Kentucky
Maine
Maryland
Michigan
Missouri
Montana
New Jersey
North Carolina
Ohio
Oklahoma
Rhode Island
South Dakota
Vermont
Washington State

States that have elected to have HHS run the high-risk pool program:

Georgia
Hawaii
Idaho
Indiana
Louisiana
Minnesota
Mississippi
Nebraska
Nevada
Tennessee
Wyoming