This month a key program created by the new health overhaul law, the Pre-Existing Condition Insurance Plan, becomes operational in many states. Over the next 40 months, this high-risk insurance pool will provide $5 billion to cover Americans who face the dual challenges of chronic illness and uninsurance. (The government's new web portal healthcare.gov provides specific information for people wishing to apply for coverage.) The high-risk pools are a temporary measure that will operate between now and 2014, when health insurance exchanges, affordability credits and the other pillars of health reform become operative.
As the high-risk pool program goes live, Republicans and others have been asking pointed questions. Senator Michael Enzi and 30 of his Republican colleagues recently sent Health and Human Services Secretary Kathleen Sebelius a sharply-worded letter regarding the high-risk pool roll-out, design and operation, and the adequacy of the initiative’s funding.
Sen. Enzi and his colleagues cite estimates from the Congressional Budget Office and the chief Centers for Medicare and Medicaid Services actuary Richard Foster suggesting that the high-risk pool funding cannot reach the full population of the medically uninsured. The letter goes on to ask whether the new program will be implemented on schedule, how many people the high-risk pools will serve, how soon states will receive funds and what happens to these participating states if the pools are oversubscribed or run out of funds. Finally, it rather darkly suggests that Democrats have "attempted to disguise the true cost of the proposals."
By any reasonable account, two things are true.
First, the high-risk pools will indeed serve a small minority of the medically uninsured. In a recent conference call for reporters, Richard Popper of the HHS Office of Consumer Information and Insurance Oversight suggested that the high-risk pools will cover roughly 200,000 individuals at any given point in time, and roughly 350,000 individuals over the life of the program.
Popper's estimates, which match those developed by others, indicate that program will serve perhaps 10 percent of uninsured Americans diagnosed with serious and costly health problems. Many low-income people in this group are unlikely to enroll because of the required premiums and out-of-pocket costs. This problem has received less attention; some of these patients may be helped by the new law's strengthened investments in community health centers.
Second, it seems that Enzi and his colleagues are rather disingenuous about both the purposes of the high-risk pools and the legislative history of health reform. The Obama administration has consistently presented the risk pools as a stopgap measure that provides some relief before 2014. But they have real shortcomings. These arise from the back-loaded, financially constrained structure of the final health reform legislation.
Perhaps Republicans were concerned by these underlying dilemmas. If so, there is little evidence of that concern in the legislative record. There is especially little evidence if one examines Republicans' own proposals for high-risk pools rather similar to those created by the health overhaul law. These pools were not intended to be a stopgap measure. Rather, they were a permanent component in Republicans' proposed health reform. Over the same 2010-2014 period, Republicans would have allocated even less than the $5 billion that the new law allocated for the high-risk pools. Given such low proposed funding, the very same access problems noted in Enzi's letter would have been more acute had Republican proposals become law.
The high-risk insurance program does not rely on budgetary chicanery or unfunded mandates. It was designed and was funded to roughly double the population served by state high risk pools. That's what it will do, providing welcome assistance to 350,000 people. The health overhaul law grants HHS Secretary Kathleen Sebelius broad authority to control many program details to honor the $5 billion funding constraint. Officials hired to implement the high-risk pools rank among the nation's most experienced government and academic experts in this area.
Yet Enzi is right that there are real problems here. The new high-risk program lacks the resources to insure every uninsured American who suffers from a costly illness or injury. Implicitly or explicitly, needy people will likely be turned away. That's not right, particularly in the wake of a historic debate which established the principle of universal access to affordable health insurance coverage.
The Obama administration will be understandably tempted to dismiss this letter as partisan posturing. I hope they greet it as an opening bid in constructing a bipartisan bill. Enzi said: "Given the importance of the high risk pool program and the reliance on this program of millions of Americans with pre-existing conditions and life-threatening diseases, it is crucial that this program be fixed and fully funded.”
Although HHS officials have been reticent to request more money, they would surely welcome additional resources. Governors—particularly Republican governors, who have conspicuously declined to set up their own risk pools, instead ceding the task to HHS—may have other interests of their own that might be addressed.
In a different political moment, these concerns might be addressed through bipartisan legislation. In our own moment, such a compromise seems a heavy lift. After all, Enzi himself was part of the unsuccessful "gang of six" negotiations that never panned out.
But there’s still a possibility for compromise. Now that the fundamental ideological issues were debated and health care reform has passed, there may be more scope for bipartisanship to tidy things up. The at times bipartisan Obama should give Sen. Enzi a ring. It's worth a try.
Harold Pollack is a public health policy researcher at the University of Chicago's School of Social Service Administration, where he is faculty chair of the Center for Health Administration Studies