High-risk pool extension could complicate rate setting

Now that the U.S. Department of Health & Human Services has extended high-risk pools for an additional two months until March 31, insurers may find it challenging to calculate and set rates for the next open enrollment period.

If consumers remain in the pre-existing condition insurance plan (PCIP) until February or March, insurers won't gain a clear sense of what type of members are enrolled in their plans sold through the health insurance exchanges and how much those members' coverage costs. Insurers need more than only a few months of claims data to accurately set rates for the next year, reported the National Review.

HHS spokeswoman Erin Shields Britt said the agency decided to postpone the end of the high-risk pool "as part of our continuing effort to help smooth consumers' transition into Marketplace coverage," according to the Wall Street Journal.

But that decision also means consumers who begin this year with coverage from the PCIP program and then shift over to a private exchange plan could be responsible for paying two separate deductibles and out-of-pocket maximums this year.

Although the extension lasts through the end of March, HHS said consumers must select and enroll in a private plan by March 15 to avoid a gap in coverage. The federally-run high-risk pool program has about 30,000 consumers enrolled, down from its peak membership of 135,000, the New York Times reported.

Some groups, including the American Cancer Society Cancer Action Network, praised the delay, saying it will help consumers with chronic conditions like cancer and heart disease to continue to receive necessary medical care.

To learn more:
- read the National Review article
- see the New York Times article
- check out the Wall Street Journal article