This week the federal government touted the number of people who have enrolled in the high risk insurance pools created in every state. After a slow start, some 50,000 people with serious illnesses nationwide have signed up for the insurance plans created by the federal health law.
But in Wisconsin and elsewhere that statistic doesn’t tell the whole story. The number of people who have signed up are far fewer than expected, but the costs of their health care per person has been about double what was projected.
Low participation in Wisconsin has eased concerns that the program will run out of money, but high health costs mean there probably won’t be any funds left over.
In 2010, Wisconsin got $73 million from the federal government to set up a high risk pool. One of the biggest concerns was making the money last. It had to be stretched out until people could buy insurance in the exchanges, the online marketplaces coming in 2014. It was estimated 8,000 people with pre-existing conditions would apply; two years later, only 1,100 have.
Amie Goldman runs the federal high risk insurance plan in Wisconsin. She says while money probably won’t run out before 2014, the entire amount will be needed.
“Fewer people have enrolled in the program than expected,” she says. “But the people that have come have had very, very high medical costs.”
Wisconsin is not alone, says Goldman. She knows this because she chairs the National Association of State Comprehensive Health Plans. Nine states have had to go back to the federal government to request more funds.
“Some of the pools (in other states) have seen people come in and within weeks of their coverage going into effect be scheduled for knee replacements and hip replacements and things like that,” she says. “So I think what’s happening is the plans are experiencing what’s known as ‘adverse selection.’”
Adverse selection happens when only people with immediate health needs sign up for coverage. With a plan geared specifically toward people with preexisting conditions – including cancer, circulatory diseases, and degenerative joint diseases – some adverse selection was expected. But the very high costs of their care has been a surprise.
Wisconsin’s federal high risk pool is a mere puddle compared to the state’s original high risk pool, which still exists and covers more than 21,000 people.
Under the newer federal pool, a person must be uninsured for six months to qualify and there’s no low income subsidy. There is financial help available under the state’s older high risk pool. But, monthly premiums are higher than the federal plan and nearly all people in the state plan have to wait six months before coverage kicks in.
This report is part of a collaboration that includes WPR News, Kaiser Health News, and NPR.