What is a High-Risk Health Insurance Pool?

A high-risk pool for health insurance is a plan designed for people who might not otherwise qualify for health insurance. The Affordable Care Act (ACA), often referred to as “Obamacare,” largely eliminated high-risk health insurance pools to help the uninsurable afford health insurance.

According to information published by the Kaiser Family Foundation, some of the high-cost conditions that have traditionally landed patients in high-risk health pools are HIV and hemophilia, which have required extended treatments continuing for years or decades.

How High-Risk Health Pools Operate

According to the National Association of Health Underwriters and their consumer guide to how high-risk health insurance pools operate, high-risk pools are self-funded health insurance plans that aren’t part of a plan a person might sign up for through their place of employment.

People who don’t qualify for these plans will contact the state in which they live to obtain their insurance which will then put the resident in contact with the private health insurance company contracted by the state to offer health insurance to high-risk individuals.

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Some of the common features of high-risk state pools have included:

  • Premiums costing more than standard non-group market rates
  • Limits on the money spent on covered services
  • High deductibles often ranging from $1,000 to $5,000

Some states running high-risk pools also capped the number of people who could enroll in an attempt to lower the cost of the insurance option. The high costs associated with high-risk insurance pools led to losses each year, but those losses were expected by program administrators due to the high price of care for people requiring expensive procedures and medication.

The Affordable Care Act and High-Risk Insurance Pools

One of the most debated features of the Affordable Care Act (ACA) was the provision that insurance companies could no longer refuse to offer insurance to individuals with pre-existing conditions. When insurers weren’t otherwise required to provide insurance to high-risk individuals by law, they would usually deny coverage to people with chronic medical conditions.

High-risk health pools were created by 35 states around the country to help the uninsured afford insurance, and the ACA even introduced a temporary plan called the Pre-Existing Condition Insurance Plan (PCIP) that would help people get insurance in the years before the ACA would go into full effect.

The House Republican Study Committee and HR 2653

The Republican-controlled 114th Congress introduced a bill in the House of Representatives called the American Health Care Reform Act of 2015 that included specific verbiage changing high-risk health insurance pools.

Rather than eliminating high-risk plans like the ACA, the act would create seed grants that states could use to reestablish high-risk health pools.

The Future of High-Risk Pools in the United States

Although the ACA has been in effect for several years, many members of Congress wish to make changes to the health care act by replacing certain provisions or repealing the entire act. In 2017, House Republicans indicated they wished to create a high-risk pool at the federal level that would help insurers provide coverage to people with pre-existing conditions and expensive health problems.

Through the American Health Care Act proposed by Republicans, the federal government would fund the program with $15 billion until 2020 when individual states would be tasked with running the pools. Modeled after Maine’s high-risk insurance pool, provisions within the proposed health care act have been criticized by Democrats as too costly and inefficient.

Although high-risk insurance pools have largely disappeared with the introduction of the ACA, efforts to repeal that law could see those pools reintroduced in the coming years. It is likely the debate over the effectiveness and cost of creating a high-risk pool for Americans with preexisting conditions will continue.