Daily News Updates - Health Insurance News

McCain's High-Risk Health Insurance Pools, Pt.4 -- Can they work?

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Douglas Stratton is the director of Indiana's [health insurance] high-risk pool and also chairman of the National Association of State Comprehensive Health Insurance Plans. This later association represents the existing state [health insurance] programs, about 34 of them. He’s in the thick of it with his comprehensive first-hand experience. His comments were "There's no way you can ever charge a premium that's going to pay the cost of this population." Right now, the main state-level control of high-risk pool costs is to limit either benefits or enrolment. Consider how bad it is in Florida, for example. The Florida Comprehensive Health Association hasn’t taken any new enrollees since 1991. That’s 17 years ago. Almost a generation! They have only 320 members whereas, analysts warn that actual need is profoundly higher. Figures rendered are as high as 20,000 more in need. The Florida State Legislature has been unwilling (and most probably, unable) to touch such an expansion.

Significant funding is required for even the best established health insurance high-risk pools. The Minnesota Comprehensive Health Association program has been going for 32 years now and is considered among the most successful. Cited as a model by McCain’s staff, it enrolls about 28,500 strong and caps its consumer premiums at 125% of the standard rates. They are able to contain spending such that premium revenue can cover about one half of the risk pools costs. So here is the rub…non-profit losses measure in the triple-digit millions of dollars. In 2007, for example, their net loss was about $115 million. This had to be made up by private health insurers as assessments to be passed along to customers in the form of higher premiums.