R.I. still undecided on high-risk pool

PROVIDENCE – Rhode Island officials have yet to decide whether to participate in a high-risk pool system being created under the federal health care reform law, with $5 billion allocated to reduce the cost of health insurance for high-cost patients through 2013.
The high-risk pools, which are to be created at the state level, but funded federally, are meant to be a short-term solution while states create health insurance exchanges.
One of the ground rules in those exchanges will be that insurers must take all comers and cannot refuse to cover preexisting conditions. Currently, insurers in most of the country can and do reject patients they deem to be too sick, or they effectively shut them out by charging them rates that are prohibitively high.
Rhode Island, however, already has so-called “guaranteed issue” in its individual market, which is served only by Blue Cross & Blue Shield of Rhode Island, with its Direct Pay line.
That’s where the complication lies, said Health Insurance Commissioner Christopher F. Koller in response to an e-mail inquiry. It’s unclear how the U.S. Department of Health and Human Services will set up the pools, and how it will accommodate guaranteed-issue states.
“We are evaluating the option and will decide when HHS gives more guidance,” he said. States have until the month’s end to indicate whether they intend to apply, he noted, and “as of now, there are no details from HHS on content or time line.”
“Our Direct Pay market is carefully overseen to meet these needs,” he added, “and any new program would have to be well integrated with it.”
The Blue Cross Direct Pay plans have about 14,000 members. One set, Pool II, has gone through medical underwriting and pays generally lower rates, on a scale based on age and gender. The other set, Pool I, pays rates equal to the highest Pool II rates.
After a roughly 6.1 percent hike that went into effect April 1, the average monthly premium for both groups combined is now $518.26, according to Koller’s office.
Koller said the high-risk pool could be used in a few different ways in Rhode Island: It could be used to discount all or parts of Pool I, in the hopes that it would attract more subscribers; it could be used to subsidize Pool I for lower-income people; or it could be used to create a new pool for people who were previously uninsured and were medically high-risk – but that wouldn’t be fair to people already in Pool I.
“We are not going to set up a separate high-risk pool and have that compete against Direct Pay,” he said. “You need everybody in the same underwriting pool.”
Koller is not a fan, in general, of high-risk pools, which have been proposed in Rhode Island before. In the 35 states that have them, he noted, they have not kept premiums low for sick people and have low enrollment.
“Guaranteed-issue states like us and the rest of New England generally have done a better job with high-risk individuals,” he said, “and we are looking for flexibility from HHS to meet the intent of the statute.”
There is another factor, too: Gov. Donald L. Carcieri, a strong critic of health care reform, is still considering the option of joining a multi-state lawsuit against the federal government.
As of last week, spokeswoman Amy Kempe said, the administration “has not made any decision on how to move forward yet.”