Why High Risk Pools (Still) Won't Work

[eridani]

Why High Risk Pools (Still) Won't Work

http://www.commonwealthfund.org/publications/blog/2015/feb/why-high-risk-pools-still-will-not-work

http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2014/dec/1792_hall_highrisk_pools.pdf

As the new Congress convenes and the Supreme Court prepares to hear arguments in the King v. Burwell case challenging tax subsidies for insurance purchased through the federally facilitated marketplaces, proposals to repeal and replace the Affordable Care Act (ACA) are resurfacing. Many of these rely on high-risk health insurance pools to cover people with preexisting health conditions.

In fact, the risk pools are suggested as a viable alternative to the ACA's ban on preexisting condition exclusions in the individual market and the marketplaces. My recent analysis of high-risk pools, however, explains why these entities simply are not a realistic alternative to coverage requirements under the ACA. In a nutshell, high-risk pools:

1. are prohibitively expensive to administer,

2. are prohibitively expensive for consumers to purchase, and

3. offer much less than optimal coverage, often with annual and lifetime limits, coverage gaps, and very high premiums and deductibles.

Comment by Don McCanne of PNHP: Those who wish to repeal or at least drastically reduce the provisions of the Affordable Care Act realize that they must come up with a replacement.

Most of the proposals would grant much greater flexibility to insurance products while reducing regulatory oversight. The problem that creates is that individuals with high medical expenses tend to be shut out of the insurance market. To ensure coverage for these individuals, high-risk insurance pools have been proposed.

This article and the brief that it is based on explain why high-risk pools are not a satisfactory solution. The premiums are unaffordable, and the pared-down benefits are unsatisfactory. These over-priced plans do not provide the financial protection that patients with chronic disorders need.

Even with the Affordable Care Act, enrollment in the temporary high-risk pools had to be closed early because they proved to be too expensive, threatening depletion of the allotted funds. They provide poor coverage at a very high cost.

With a single payer system this problem disappears. Funding is based on ability to pay, through the tax system, and not on the basis of anticipated medical expenses. Everyone receives the care they need, regardless of their health status. The fragmented plans supported by the repeal and replace people cannot do that.