Insurance rates jump for poor in Pennsylvania

About 2,400 poor adults on the waiting list to join AdultBasic, Pennsylvania's state insurance program for those who don't qualify for Medicaid, were hit March 1 with a near doubling of their monthly premium, from $313 to $600.

Faced with cost hikes, the state opted to preserve the $36 per month fee for the 39,000 residents already enrolled in the main program and shift the burden to those on the waiting list, who have been allowed to purchase the same coverage at a higher cost since the program's inception in 2002.

Because the waiting list members buy insurance on a month-to-month basis, many do so only when they are sick, thus adversely affecting the risk pool and increasing costs. But hiking costs for this group, which includes individuals who make less than half of the federal poverty level--or about $21,672--will likely only make matters worse, the state insurance commissioner, Joel Ario, admitted to the New York Times. As more people drop the program and cause costs to rise further, it "is likely to send us into a death spiral," he said.

Some officials suspect the new rates are part of a tactic to decrease enrollment in the AdultBasic program before the insurers' agreement to help fund it expires at the end of 2010. "Our fear is that the state is being pressured by insurers to raise rates as a way to limit the number of people enrolled in the program," Kristen Dama, a staff lawyer with Community Legal Services of Philadelphia, told the Times. "Then if insurers decide not to continue underwriting the program after Dec. 31 of this year, there will be fewer people enrolled in it that suddenly will lose coverage."

According to Aria, the solution to his state's predicament would be to require nearly all residents to carry insurance, so that costs would be spread more evenly.

To learn more:
- read the full New York Times article [1]

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