The New York Times is out this morning with a story regarding a study performed by the National Institute for Health Care Reform analyzing the inadequacy of the high-risk pools included in the health care law. The study finds that as many as 7 million individuals could be eligible to enroll in the risk pool – a number that drops to 5.6 million if those with access to other coverage are excluded. By contrast, the study finds that the $5 billion in funding included in the health care law would only cover about 200,000 people annually, due in part to the average $6,000-$7,000 subsidy provided to participants (as opposed to the $4,200 average subsidy provided in existing state high-risk pools). The study notes that due to the higher subsidies provided, “the new federal pool will almost certainly be less costly for enrollees” than existing pools “and will probably offer superior benefits.” But enrollees in existing pools will be “trapped in their inferior arrangements” due to the way the law was drafted.
In addition to the inequities present for those in existing pools, states too have worried about being left on the hook if the $5 billion in federal high-risk pool funding runs out early, as this study confirms it would. But the paper also points out that states who allow the federal government to establish the new risk pools created by the law in their states (as 20 have done) have no requirement to maintain their existing pools – which may lead those states to eliminate their programs or (more likely) freeze enrollment. This scenario would of course protect state budgets, but it would further stretch the $5 billion provided for the program, meaning Congress may be asked to consider a high-risk pool “bailout.”
The study closes with a pessimistic note about the insurance markets in January 2014, noting that a likely waiting list to enter the high-risk pools, coupled with their closure upon establishment of the exchanges in January 2014, could well release a flood of sicker enrollees into the exchanges right at their outset, potentially spiking premiums and discouraging healthy people from joining. The sum total of these possible results – unfunded mandates on states, sick individuals unable to obtain coverage, and higher premiums – would leave anyone wondering where exactly the “reform” in the health law went.