California To Launch High-Risk Health Insurance Pools

In March 2010, President Obama signed into law the national health care insurance reform bill known as the Patient Protection and Affordable Care Act. The new law contains a provision that requires the states to establish high-risk health insurance pools no later than 90 days after the bill became law. The purpose of these pools is to provide health insurance to people who have been denied coverage due to pre-existing medical conditions.

This high-risk health insurance pools will be dissolved on December 31, 2013. Starting on January 1, 2014, all private health care insurance companies will be required by the new federal law to cover consumers with pre-existing medical conditions. (To read what I believe the effects of this law will be on private health insurance, please see my previous posts.) Secretary of the Department of Health and Human Services Kathleen Sebelius sent a letter to the governors of the states, requesting their plans for implementing the high-risk health insurance pools.

In April 2010, Governor Schwarzenegger notified Secretary Sebelius that California would operate the temporary high-risk health insurance program alongside the state’s existing high-risk pool, known as the Major Risk Medical Insurance Program (MRMIB). California’s MRMIB is a partnership between government and the private insurance industry that uses private vendors supervised by the MRMIB to offer California residents health insurance through various programs, including California’s Healthy Families Progra, or Health Insurance Program (CHIP).

The criteria for eligibility to enroll in the high-risk pools will be different than the requirements for existing programs. This is an overview of the high-risk health insurance program:

Eligibility. The high-risk pools are available to American citizens or resident aliens who have not had health insurance coverage for a minimum of six months because coverage was denied due to pre-existing medical condition. To demonstrate eligibility, applicants must provide a letter of denial of coverage from a private health care insurance company.

Cost. The MRMIB has not announced which vendor will provide the coverage for people with pre-existing conditions, so the actual costs are not yet know. Based on what other states are charging, however, it is likely that with federal subsidies, premiums will range from $400 a month to $1,200 per month, depending on gender, age, and other variables. Annual deductibles could be as high $3000 for an individual and $6000 for a family.

Funding. According to the Congressional Budget Office (CBO), the entire budget for the PPACA now exceeds $1.05 trillion for the first ten years, but the amount set aside for the high-risk pools is just $5 billion, or less than one half of one percent of the total budget. That money will be spent within two years, according to the CBO.

Enrollment. If you have been denied health insurance coverage because of a pre-existing condition, you can log-on to the U.S. government’s health care insurance Web portal at http://www.healthcare.gov. By completing the online fields and following the links, you will learn more about applying for this new, temporary coverage.