More than 4 million “medically uninsurable” people are potentially eligible for enrollment in state-administered high-risk health insurance pools (HRPs) but fewer than 200,000 were actually enrolled in 2008, according to a report from the U.S. Government Accountability Office.
A growing number of states—35 as of June 2009—have created HRPs primarily to provide coverage to individuals whose health status limits their access to coverage in the private individual health insurance market. HRPs—typically state-run not-for-profit associations—often contract with a private health insurance carrier to administer the pool and offer a range of health plan options to such individuals, who are commonly referred to as medically uninsurable. Because of the higher health care costs typically incurred by medically uninsurable individuals, all pools operate at a loss.
In 2008, the average annual deductible for the most popular plan offered by each HRP was $1,593—almost three times as high as the average annual deductible of $560 among employer-sponsored health insurance plans. About 63 percent of enrollees in these most popular HRP plans had deductibles of $1,000 or greater. In comparison, almost 88 percent of enrollees in employer-sponsored plans had a deductible of under $1,000 or no deductible. Premiums for HRP health plans are higher than for plans offered to healthy individuals in the private health insurance market; however, these premiums are capped to limit enrollees' costs and are thus insufficient to cover the costs of enrollee claims.
Recent healthcare reform proposals call for an expanded role for HRPs to enhance health insurance options for the medically uninsurable.
