November 7, 2009

Washington Journal host Peter Slen asks Marsha Blackburn about an editorial in The New York Times The Republican Health Plan and reads this passage:

It has some good provisions, such as prohibiting insurers from imposing annual or lifetime caps on what they will pay and automatic enrollment of workers in employer-sponsored group coverage. But it would not prevent insurers from denying coverage or charging higher premiums based on pre-existing conditions.

Blackburn's response:

Blackburn: Well, one of the ways to address that is going another route and getting to that universal access component that so many people want to see but doing it through high risk pools and through re-insurance and this is a model that many of our businesses are accustomed to dealing with. You know, they have different high risk for things—worker’s comp and other issues—and there is a way to do that and to address that and bring people into that, into those high risk pools. Addressing pre-existing and chronic conditions absolutely and being certain that there is a pool for that, that is set up, and there again, people can go to and look at that, look at the bill and see how that is specifically addressed.

So the GOP's plan according to Rep. Blackburn is if you have a pre-existing condition, you're going to be put into a high risk pool. I don't believe she explained how that would prevent people from paying higher premiums for pre-existing conditions or from being denied care—quite the opposite.

Under conservative plans for health care reform, many more Americans with pre-existing conditions would find it even more difficult to obtain reasonably priced care. This is because conservative plans often seek to substitute insurance coverage purchased in the individual market for group coverage, such as the insurance that many Americans have through their employers. These proposals also call for expanding existing high-risk pools, such as the Maryland program, to provide coverage for people with chronic illnesses and costly health histories. Today’s state-based high-risk pools provide an important coverage option for some individuals, but the coverage is expensive, and it’s only available to a small portion of those eligible.

High-risk pools have been around for over 30 years and currently exist in 35 states, but they only cover about 207,000 Americans. The biggest barrier to enrollment is cost. High-risk pools are inevitably expensive because all of the enrollees have medical conditions that could potentially result in costly medical bills, which means the pools cannot spread costs across low-risk and high-risk individuals. Despite attempts to cap premium rates, the coverage is still unaffordable for many. In fact, a recent study found that premiums for high-risk pools are unaffordable for about one-third of eligible individuals. High premiums and high deductibles are often a greater burden on individuals with expensive medical conditions who have already spent large amounts of their income on health care.

Some proponents refer to high-risk pools as “safety nets,” but in reality, the pools do not provide a guarantee of coverage. Most have an exclusion period—some period of time during which an insurer can exclude coverage for certain medical conditions that exist before the insurer issues coverage. These exclusion periods can last anywhere from 90 days to 1 year. Some pools cannot afford to admit more individuals; they either have waiting lists or are completely closed to new enrollees. In the meantime, individuals with costly conditions must go without coverage.

In theory, these pools could provide a viable option for high-cost individuals. In practice, using these pools as a model for nationwide reform would be extremely expensive. Policymakers should consider other approaches to providing affordable, adequate coverage to costly individuals, such as expansion of group coverage options and guaranteed availability of health insurance, known as guaranteed issue in insurance parlance.

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