"High-Risk Insurance Pools" Urged By Obamacare Repealers, But At What Cost? : Shots - Health News Some Republicans in Congress say want to revive high-risk pools to cover sick people. But people who have been in those pools and states who funded them say the costs were exorbitant.
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Drowning In A 'High-Risk' Insurance Pool, At $18,000 A Year

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Drowning In A 'High-Risk' Insurance Pool, At $18,000 A Year

Drowning In A 'High-Risk' Insurance Pool, At $18,000 A Year

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  • <iframe src="https://www.npr.org/player/embed/514991567/515921489" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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SCOTT SIMON, HOST:

And House Republicans, as we noted, have met to discuss potential replacements for the Affordable Care Act. One suggestion to lower some people's premiums is to create what are called high-risk health insurance pools. But as Minnesota Public Radio's Mark Zdechlik reports, Minnesota tried this system once, and it was expensive.

MARK ZDECHLIK, BYLINE: The argument goes like this. Separate out the healthy people who don't cost very much to insure from people with pre-existing conditions. They could get health insurance through subsidized, high-risk coverage. Minnesota's newest congressman, Republican Jason Lewis, endorsed high-risk pools on CNN.

(SOUNDBITE OF TV SHOW, "STATE OF THE UNION")

JASON LEWIS: Minnesota had one of the best insurance pools - high-risk pools in the country.

NEERA TANDEN: Which failed in most states.

LEWIS: It was - and it was undone by the ACA.

ZDECHLIK: It's true that Obamacare banned state high-risk pools, including the Minnesota Comprehensive Health Association, or MCHA. That's because the ACA requires that insurers sell to everybody, regardless of their health. The high-risk pools were government-sponsored programs to help insure people other health plans refused to cover. That kept high-cost people out of the general insurance market and helped hold down costs for everybody else. Supporters tout a return to that approach as a smart way to bring down premiums. But, says Craig Britton of Plymouth, Minn...

CRAIG BRITTON: I think that's a lot of baloney.

ZDECHLIK: Britton was forced to buy MCHA coverage because of a pancreatitis diagnosis. He paid more than $18,000 a year in premiums.

BRITTON: That is catastrophic cost.

ZDECHLIK: That's the problem with high-risk pools, says Minnesota health department economist Stefan Gildemeister.

STEFAN GILDEMEISTER: It's not cheap coverage to the individual, and it's not cheap coverage to the system.

ZDECHLIK: MCHA premiums cost policyholders 25 percent more than conventional coverage.

GILDEMEISTER: So there were people out there without - who had a chronic disease or had a pre-existing condition who couldn't get a policy.

ZDECHLIK: And he says, for the insurer, even the higher premiums fell far short of covering the full cost to care for the roughly 25,000 people on MCHA. The program needed more than $173 million in subsidies in its final year of normal operation. The money came from fees on commercial insurance plans, essentially shifting the cost to people who get insurance through work.

University of Minnesota health policy Professor Lynn Blewett says there is a better alternative than a return to high-risk pools. It's called reinsurance, and it provides health plans with extra money if they get nailed with higher-than-expected costs. The big question, Blewett says, is whether lawmakers will balk at the cost of keeping premiums down for consumers, whatever the approach.

LYNN BLEWETT: That's the kind of rub, is where that funding is going to come from. And is the federal government or the state government willing to put up the funding needed to make some of these fixes?

ZDECHLIK: A national plan offered by Republican Speaker of the House Paul Ryan would fund high-risk pools with $25 billion over 10 years. The nonpartisan Commonwealth Fund estimates it would cost much more than that, almost $180 billion a year. Researchers at the consulting firm McKinsey & Company say reinsurance would likely cost about a third what the high-risk pool option would.

For NPR News, I'm Mark Zdechlik in St. Paul.

SIMON: And that story is part of a reporting partnership with NPR, Minnesota Public Radio and Kaiser Health News.

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