Ryan’s home state highlights challenge for GOP high-risk insurer pools

Greg Nash

Speaker Paul Ryan (R-Wis.) gave a shoutout to state high-risk pools this week while defending the GOP’s updated healthcare reform legislation, calling one in his home state “darn good.”

“They work,” he told reporters at his weekly press conference. “Now that we’re going to be adding federal funding to it, they’ll work even better, and you’ll be able to lower prices even more.” 

But while Wisconsin’s high-risk pool did mirror rates in the commercial market, it still left roughly half a million people uninsured, according to Donna Friedsam, health policy program director for the University of Wisconsin Population Health Institute. Premiums and deductibles varied, as did the types of services covered.

{mosads}“We don’t see high-risk pools as a population-level solution either for broad-based coverage or reducing cost,” Friedsam said. “But if this is a route that is going to be pursued, it’s going to require a fairly heavy federal subsidy in order to make high-risk pools affordable for the people that are going to need to gain access to that kind of coverage.”

The GOP gave up on its effort to get a healthcare vote this week but has signaled it will try again soon.

High-risk pools have become central to the reform legislation. They are a requirement for states that want to opt out of certain ObamaCare requirements, such as the one that currently prohibits insurers from charging sicker customers more for coverage.

One proposed amendment to the GOP health plan would also establish an “invisible” high-risk pool, which keeps sicker customers in the traditional market but subsidizes their care.

The Republican bill could contain $115 billion from 2018 to 2026 to help states cover sick residents, with $15 billion specifically slotted for the “invisible” high-risk pool. But depending on the number of states that opt out of ObamaCare rules, experts say, that could fall far short.

One stomach cancer patient in Wisconsin paid $320 a month with a $3,500 deductible under her high-risk pool coverage, but her plan did not cover annual breast cancer screenings, according to the Wisconsin State Journal. She now has an off-exchange plan at $610 per month with a $6,550 deductible, but with MRI coverage.

The pool only insured 21,000 people at its peak, and rates varied by geography, age and gender — the last of which is prohibited in the GOP bill. Insurers also required a six-month waiting period before receiving coverage for pre-existing conditions and enforced a $2 million lifetime cap on coverage, both of which were components of the state’s private individual market as well. 

The coverage limits did help the pool sustain funding, but some of those are not allowed under the GOP proposal. Under the bill, insurers can’t place lifetime caps on enrollees. However, an amendment would let states opt out of core ObamaCare provisions — and let insurers charge certain sick customers more — through a waiver.

The provision would allow insurers to charge sick customers more if they fail to maintain “continuous coverage,” meaning they cannot go without insurance for more than a two-month period. 

Wisconsin’s pool also had multiple sources of funding — from premiums, taxes on health plans and cuts to doctors’ pay. A previous version of the bill’s amendment required health plans to surrender the majority of premiums to the pool, but the latest version does not.

The concept of the “invisible” pool was modeled on Maine’s high-risk pool, but important differences exist, experts say. The invisible pool also does not cover people who experience unexpected high medical costs. 

Republicans, however, insist that their approach will lower premiums for everyone, including those both helped and hurt by ObamaCare.

“We believe the smarter way to go on getting premiums down and protecting people with pre-existing conditions is to have federal and state support for people who are sick,” Ryan said.

“Support that catastrophic illness with greater subsidies so that everybody else doesn’t have to bear those costs in their insurance pools.”

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