Over the last 35 years, high-risk pools have provided a coverage stopgap for individuals excluded from a traditional health insurance policy due to a pre-existing condition, but those programs have costly, according to a Kaiser Family Foundation issue brief.
The brief comes more than a month after House Republicans unveiled a replacement plan for the Affordable Care Act, which includes $25 billion in appropriations for “robust” high risk insurance pools.
Decades prior to 2014, when the ACA barred insurers from excluding individuals with pre-existing conditions or charging them higher premiums, states established their own high-risk pools that offered coverage for residents locked out of private plans. Typically these state risk pools included premiums well above private insurance rates, coverage exclusions for pre-existing conditions, and lifetime or annual limits. By 2011, 35 state high-risk pools covered more than 226,000 people, but racked up $1.2 billion in annual losses.
In 2011 the federal government created the Pre-existing Condition Insurance Program (PCICP) as a temporary coverage solution for high-risk individuals leading up to new rules prohibiting insurance discrimination. The program’s enrollment peaked in March 2013 with nearly 115,000 members, and by the time it concluded six months later, the PCIP had sustained nearly $4 billion in losses.
In a recent post, the Center for American Progress argued that the GOP's replacement plan would "quarantine people who are old and/or sick in separate, more expensive, and unsustainable markets," noting that high-risk pools have been cost prohibitive. CAP's post echoed previous arguments from policy experts that said the GOP’s plan to create state-based high-risk pools is unworkable because of skimpy coverage and high administrative costs.
- read the KFF brief
- here's the Center for American Progress post