The high risk pool plans mandated by the Affordable Care Act are now in place and accepting applications. Whether seeking coverage in a state that offers its own plan or applying for the Health and Human Services version, many uninsured Americans with preexisting medical conditions will find their hope of getting health insurance dashed.
The ability of health insurance companies to deny coverage to anyone applying for individual health insurance because of a preexisting medical condition was one of the strongest arguments for passing the Affordable Care Act.
But the eligibility requirements which the high risk pool plans impose will keep millions of Americans from getting the coverage they need.
Eligibility may keep more out than affordability
I have already discussed the issue of affordability. See report here. Many will be unable to afford the cost of getting coverage through the high risk pool plans.
To make matters worse, the eligibility requirements will keep millions more out of the plans. One can only assume that the eligibility requirements were offered as a panacea to an insurance industry that harped on the dangers of adverse selection.
Why a 6 month waiting period?
The high risk pool plans are introduced to Americans as follows:
The [Affordable Care Act] creates a new program – the Pre-Existing Condition Insurance Plan — to make health coverage available to you if you have been denied health insurance by private insurance companies because of a pre-existing condition.
That sounds attractive and just what is needed, BUT not so fast. The be eligible an American must have been uninsured for six months prior to applying.
A preexisting condition usually is the result of some serious medical condition. Cancer, diabetes, heart disease would all be sufficient cause for an insurance company to deny individual coverage. Now, under the eligibility requirements of the high risk pool plans, Americans with serious medical conditions must be uninsured for 6 months before applying for coverage.
All those people who struggled to make COBRA payments after being laid off are deemed ineligible if they have had insurance coverage within the last 6 months.
A Hobson’s Choice
What does a person with a preexisting medical condition do? Telling a person with a serious medical conditions that they cannot get in the Pre-Existing Condition Insurance Plan unless they have been without insurance for at least 6 months can be a death sentence for some.
The preexisting conditions that result in health insurance denials often require constant medications and treatment without which the condition will get significantly worse. Ironically the new high risk pool plans seem to require that people get a lot sicker before they can get into the program which was supposed to help them get health insurance.
And what about after the six months? Again it varies in the states that run their own pool plans, but the federal plan has a uniform $2500 deductible. That means, except for preventative services, the plan pays nothing until the insured pays the first $2500.
This confuses many people especially when they read the language of the HHS website which says
All covered benefits are available for you, beginning on your coverage effective date, even if it’s to treat a pre-existing condition – there are no waiting periods.
That is true but only after the insured has spent $2500 out of his or her own pocket. And after the deductible there is co-insurance of 20%, so the insured will not have full coverage until they have paid a total of $5950 per person, per year.
The insured, who is paying a pretty hefty premium in addition to the deductible and co-insurance, can also be assessed more costs if they fail to use doctors who participate in the qualified network.
And it does not end there. There is a separate although much lower deductible for prescription drugs. There is a complex schedule which can be viewed here. Essentially the insured’s first 2 prescriptions will cost $4 for generic and $30 for brand name drugs and after that will pay 50% of the cost of the drug. Mail order is a bit more cost effective but not much.
Recently major newspapers have reported that there have been few applications for participation in the high risk pool plans. It there any wonder why?
Have you been without coverage? What do you think of the eligibility requirments? Post your comments, concerns and opinions become a part of the discussion. SUBSCRIBE here and make your voice heard.