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Federal Eye
Posted at 06:00 AM ET, 06/01/2011

Feds cut rates for hard-to-insure Americans

Rein

The Obama administration announced Tuesday that it is moving to reduce health insurance premiums in nearly two dozen states, by as much as 40 percent, to make it easier for people with pre-existing conditions to get coverage.

The federal government also is relaxing restrictions on who qualifies for high-risk insurance pools, also known as health plans designed for people with medical problems. These are designed in the new health care law to serve as a bridge until 2014 for those who are sick; at that point, insurance companies can no longer deny coverage for pre-existing conditions.

Tuesday’s announcement by Health and Human Services Secretary Kathleen Sebelius means that prices for these high-risk plans will fall more in line with premiums paid by the average healthy person.

“Until [2014], people who are locked out of the market can get into it,” Sebelius said. She said diseases like cancer, diabetes and asthma — some sudden, some chronic — have pushed up the cost of health insurance for many Americans.

The lower premiums are an effort to increase enrollment in one element of the 2010 health-care law that has drawn less interest than the administration hoped. Just 18,000 people have signed up for coverage in high-risk pools, instead of the 375,000 that health advocates hoped would get coverage. The government set aside $5 billion to fund the plans.

The federal government, through the Office of Personnel Management, operates high-risk plans in 23 states and the District. The lower premiums, which take effect July 1, affect only those plans.

The rest of the states operate their own pools. Federal health officials are encouraging those states to review their rates, to make sure they compete with premiums for healthy people.

But premiums in the federally run plans should drop by as much as 40 percent in 17 states and the District, officials said, and less in the other states. Sebelius said premiums for high-risk people in Virginia should drop by $1,200 a year.

The administration also is adjusting its eligibility standards. Applicants for high-risk plans will no longer have to furnish a letter from an insurer showing that they were denied coverage. Instead, they need only a letter from a doctor, nurse or physician’s assistant stating that they have a medical condition.

Applicants for the high-risk pools must show they have been without insurance for at least six months.

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By  |  06:00 AM ET, 06/01/2011

 
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