One of the first big provisions of the health-care-reform law to
take effect is the creation of a $5-billion program to provide
coverage for people with medical conditions who have been rejected
by private insurers. The Pre-Existing Condition Insurance Plan, a
new high-risk pool, was launched in most states on July 1 and is
designed to last until insurers can no longer reject people because
of their health, in 2014.
The law sets the general rules for eligibility, pricing and
coverage, but the specifics vary by state. Twenty-nine states (and
the District of Columbia) chose to administer the plans themselves,
while the U.S. Department of Health and Human Services will run the
plans in the remaining 21 states.
I've received several questions from readers about the new
high-risk pool and how it will work.
Who can be covered by the new high-risk pools?
The pools are designed to provide coverage to people with
medical conditions who have been rejected by private insurers. The
plan sounds good in theory, but there's one big catch: The law
specifies that you must be uninsured for six months before you can
be covered under the new pool. To qualify for the HHS-run program,
you must also provide a letter showing that you have been rejected
for private coverage within the past six months or were offered a
policy that excluded coverage for your medical condition (and were
still uninsured for six months). The states administering their own
plans have similar requirements.
When will the coverage take effect?
The federal program has a rolling start date. People who apply
by July 15 will start receiving coverage on August 1; if you apply
by August 15, then your coverage will start on September 1. Most
state plans started taking applications by July 1, and the last few
plans will be opening before the end of the summer.
How much does it cost?
The price varies by state and age, but the law specifies that
the plans must charge market rates -- so someone in the high-risk
pool cannot be charged more than a healthy person would pay in that
state. A 50-year-old in the plan administered by HHS would pay from
$350 per month up to $530 per month, depending on the state.
Someone in their late twenties would pay from $140 to $200 per
month. The HHS-administered plan has a 20% co-payco-pay, like many
private plans, with no cost sharing for preventive care. State
plans are offering a range of deductibles; many have a
high-deductible plan that can be paired with a health savings
Aren't those prices lower than those of some states' current
high-risk pools? Can people in those pools join the new
Pre-Existing Condition Insurance Plan?
Yes, the prices for the new high-risk pool are generally lower
than they are for states' current pools, which often charge 150% to
200% of the standard rates -- or higher. Thirty-four states
currently have high-risk pools, which will continue to exist in
addition to the new pool and will have different eligibility
criteria and prices. "People who are currently in their state's
high-risk pool will not be eligible for the new high-risk pool,"
says Kathleen Sebelius, Secretary of the U.S. Department of Health
and Human Services. You can qualify for coverage under the new pool
only if you are uninsured for six months.
The new pool is likely to be less expensive than the current
pool. Won't that encourage people to drop their coverage for six
months just so they can switch to the less-expensive
"I hope not," says Sebelius. "Typically, people with health
conditions cannot go for six months without coverage. It's a fairly
limited number of people, and it's working as a bridge to 2014,"
when insurers cannot reject people because of their health. HHS
anticipates that about 200,000 people will be enrolled in the new
high-risk pool at any given time.
Can states use any of the $5 billion designated for the new
high-risk pool to help lower their premiums and provide better
coverage in their current high-risk pools?
"Unfortunately, we don't think the law allows it," says
Sebelius. "The language is pretty restrictive." HHS is currently
dealing with the handful of states that have guaranteed-issue
programs, however -- where people currently cannot be rejected
because of their health -- to determine how they can use the money
to help their residents.
I lost my job more than a year ago, and my COBRA eligibility
will be ending in a few months. Should I look into coverage
through the new high-risk pool?
No. Because you're coming off COBRA, you have special rights
(called "HIPAA eligibility") that requires states to provide you
with coverage without a waiting period, regardless of your health,
as long as you haven't gone for more than 63 days without coverage.
Contact your state insurance department to find out more about its
HIPAA rules (see
for contacts, or
How can people find out about the high-risk-pool options in
their state and sign up?
A New Site to Help You Navigate Health Insurance.