D.C., Md. and Va. to get $207 million to operate high-risk insurance pools

By Darryl Fears
Washington Post Staff Writer
Thursday, July 1, 2010

The Obama administration will allocate $207 million to the District, Maryland and Virginia on Thursday to fund insurance pools for people who have been denied affordable medical coverage because of preexisting health problems.

The money is part of a $5 billion federal effort to cover Americans with serious medical conditions who have been uninsured for at least six months. The temporary high-risk insurance pools are among the first programs to operate under the health-care law signed in March and are the subject of significant partisan fighting on Capitol Hill.

Maryland is expected to receive $85 million to operate a high-risk pool, according to a U.S. Department of Health and Human Services fact sheet. Virginia is slated to get $113 million, and the District, $9 million. Republicans have said the pools are too expensive, citing a report by the nonpartisan Congressional Budget Office that said the cost of operating them could balloon an additional $5 billion to $10 billion should federal officials decide to expand the $5 billion pot before the program ends in 2014.

The Obama administration said the pools are needed to cover hundreds of thousands of people with preexisting conditions related to diseases such as cancer and arthritis and who are commonly denied insurance. The administration said the program will offer proof that the health-care reform plan will work when it begins in 2014.

Maryland is one of 29 states that submitted proposals to Health and Human Services several months ago, and it plans to start operating its program immediately. Officials project they will be able to serve about 3,500 Maryland residents. Applications will be available Thursday in states where the federal government will operate the pools, including Virginia.

The Web site www.healthcare.gov tells how the program will work in each state.

"We're aiming for September 1" to accept the first enrollments through CareFirst Blue Cross Blue Shield, said Rex Cowdry, executive director of the Maryland Health Care Commission. Cowdry said the state's proposal to operate a pool is expected to be signed this week.

Virginia is one of 21 states that chose not to operate a pool, opting instead to allow the federal government to run it. The Virginia General Assembly passed a law prohibiting the reform law's "individual mandate" requiring residents to purchase coverage, saying it infringes on state statutes. Virginia Attorney General Ken Cuccinelli II (R), who is suing the federal government over the law, will be in federal court in Richmond on Thursday to argue the state's case. The Obama administration will argue that the lawsuit is frivolous and should be dismissed.

The District plans to join Maryland and other states in operating a pool for about 600 eligible residents after the Department of Health Care Finance negotiates a coverage plan with CareFirst and at least one other insurance company. A spokesman for CareFirst said the insurer was asked by the department to develop a proposal June 15 and return it by mid-July, about two weeks past the federal start date.

"We are now developing our response and expect to submit it in . . . the timeline discussed," the spokesman, Kevin Kane, wrote in an e-mail. District officials said a pool could start in late summer.

Maryland is one of 35 states that already offer high-risk pools for people who have been denied coverage, according to a Web site operated by the federal Department of Health and Human Services. The site, HealthReform.gov, cited a study that said only 8 percent of the uninsured enroll in high-risk pools, mostly because of high premiums.

State pools often limit enrollment to control costs. One state high-risk pool has been closed to new beneficiaries since 1991, the HHS Web site says.

CONTINUED     1        >

© 2010 The Washington Post Company