High Risk Health Insurance Pools Are Coming

One of the major objectives of the Obama healthcare plan was providing coverage for the millions of Americans with pre-existing conditions who have been shut out of appropriate healthcare coverage. The bill that was passed will address these issues over time with health insurance reform. But in the meantime insurance pools were to be set up to provide more immediate relief for these people. Well it looks like that relief is actually coming.

Five billion dollars has been allocated in the new plan to insure individuals with pre-existing conditions before the private insurance companies must accept them by 2014. The state governments have the option of running these pools directly or contracting out to a not for profit agency to do it. The new law calls for these pools to be set up within 90 days, so the clock is ticking. HHS Secretary Kathleen Sebelius is asking states to report back by the end of the month how they want to proceed.

Interestingly enough, over 30 states already have similar pools in place that cover over 200,000 individuals. Not surprising though is that every one of these pools operates at a loss. The concern is the size of the loss. In 2008 these pools paid a total of almost $2 billion in claims. The question is how far will our $5 billion go and how will this stay funded until 2014? Also will this cause a shakeout of insurance companies by 2014.? I suppose the administration is just counting on them to donate the huge profits they have been making to this goodwill effort. I'm not holding my breath.

More on this later.

Mark Brodeur