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Now, under that same health care law, Americans who have been denied coverage because of preexisting conditions will start to get insurance this summer. The law sets aside $5 billion to fund so-called high risk pools. Those are pools for people with high risk of illness.
Many states already have similar programs, but they're plagued with problems. The Obama administration now hopes the more tightly regulated and expanded high risk pools will work better. From member station KQED, Sarah Varney reports.
SARAH VARNEY: You'd think Miles Owyang has a charmed life. The radiant nine-year-old is a fierce tennis and lacrosse player. His bedroom overlooks a lush wooded ravine in the affluent Silicone Valley town of Saratoga. But Miles's problems began before he was even born.
Ms. TARA ANDERSON (Miles's Mother): He was six weeks premature, C-section. And they immediately took him ICU.
VARNEY: Tara Anderson is Miles's mom.
Ms. ANDERSON: In ICU they determined that he had a heart ailment. Nothing serious, but they just said we just need to monitor it as days go by.
VARNEY: Anderson says her son's heart condition was never a problem when she and her husband, both electrical engineers, had employer-based health insurance. But when they were laid-off and ineligible for extended employer coverage, they bought a family policy on the individual market. None of the insurance companies, though, would accept Miles.
Ms. ANDERSON: And at that point, we applied for the high-risk pool in California, and they told us it'll probably be about three months before he's accepted.
VARNEY: The high-risk pools in most states are largely viewed as a failure. They were originally meant as an insurer of last resort for those shut out of the private health insurance market. But according to the national association of state high-risk programs, they cover only about 200,000 Americans. The California plan is capped at 7100 members and often has a wait list. The premiums and deductibles are wildly expensive, and the policies have spending caps that are frequently exceeded.
The health care overhaul signed by President Obama, envisions a new type of high-risk program, one that is, by law, more affordable and open to far more people.
Deborah Chollet is a senior fellow at the Mathematica, a nonpartisan research firm.
Dr. DEBORAH CHOLLET (Senior Fellow, Mathematica Policy Research, Inc.): People who apply for this program are going to pay standard rates. That is, the rate that they would pay for a policy if they did not have a pre-existing condition that excluded them from coverage. That is an enormous benefit.
VARNEY: Chollet is widely seen as an expert on high-risk programs. She says medical charges for those in the high-risk pool could drop by as much as a third, and they'll no longer face annual or lifetime caps. That means a family would pay no more than $11,900 a year. Charges for an individual would be capped at just under $6,000, and theyll be limits on how much older people in the program can be charged.
The enrollment rules will loosen as well. In some states, current applicants must prove private insurers rejected them. Under the new law, anyone with a pre-existing condition who lacks coverage can join, so long if theyve been uninsured for at least six months. The federal government will define what those conditions are, but they are likely to be the same long list used by insurers - including cancer, diabetes, heart disease - even pregnancy.
Dr. CHOLLET: My sense is, they're going to let people in under all reasonable circumstances. That if someone has actually made every effort to maintain coverage, they would be eligible for this.
VARNEY: Chollet says one to two million people could gain coverage under the federally financed program.
It's likely the federal government will give some of the $5 billion directly to states to expand their pools. But, there are about 15 states that don't have them, and quite a few more would need to change their laws to qualify for the new federal funds. In any case, the federal government will likely also offer a national pool.
Like many state health care regulators trying to make sense of the complicated Health Care Law, Lesley Cummings, director of the California's high-risk program, says she has far more questions than answers.
Ms. LESLEY CUMMINGS (Executive Director, California Managed Risk Medical Insurance Board): We don't, yet, know the details of how it will work, and are eager to talk about this with our federal colleagues.
VARNEY: The newly expanded pools will ramp up quickly. The law says they must be implemented by mid-June. Theyll phase out in 2014 when private insurance companies will be forced to sell policies to the medically uninsurable.
Cummings is looking forward to that day, when she no longer has a job.
Ms. CUMMINGS: Thats the best thing for medically uninsurable people, is not to be segmented into their own risk pool, but to be in with everybody else. Honestly, it gives me goose bumps.
VARNEY: The federal government has already begun reaching out to states, to gauge their interest in starting or expanding coverage for high-risk people whove been uninsured for six months. Some states are balking, though. Georgia's insurance commissioner said this week, his state will not participate. All states have until the end of this month to submit an application.
For NPR News, Im Sarah Varney.
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