Secret Sauce In Mainefs Successful High-Risk Pool: Enough Money
By Patty Wight, Maine Public
May 17, 2017 - Kaiser Health News
As the GOP health care bill moves from the U.S. House of Representatives to
the Senate, many consumers and lawmakers are especially worried that people with
preexisting conditions wonft be able to find affordable health coverage.
There are a number of strategies under consideration, but one option touted
by House Republicans borrows an idea that Maine used just before the Affordable
Care Act went into effect. Itfs called an ginvisible high-risk poolh — invisible
because people in it didnft even know they were.
The Maine pool earned higher marks than most state high-risk pools because it
had a key ingredient: enough money.
gThe problem is that in order to do the Maine model — which Ifve heard many
House people say that is what theyfre aiming for — it would take $15 billion in
the first year, and that is not in the House bill,h Sen. Susan Collins (R-Maine) told
Politico. gThere is actually $3 billion specifically designated for
high-risk pools in the first year.h
Herefs how the Maine model worked: When a resident applied for health
insurance, they had to fill out a questionnaire. If they had certain medical
conditions known to be costly, their application was flagged for the high-risk
pool. To consumers, it was seamless: They paid regular premiums and got the same
sort of coverage as any other enrollee in their chosen health plan.
What was different was how their medical bills were paid. The state set up a
nonprofit entity — the Maine Guaranteed Access Reinsurance Association, or
MGARA. Mitchell Stein, an independent health policy consultant, explained that
the money to pay for these high-cost patients came from two sources: the
insurance policy premiums paid by patients within that high-risk pool and a
$4-a-month surcharge on all policyholders in the state.
This ginvisible high-risk poolh was just one part of a larger health reform
law in Maine, Stein said, and that makes a straight-up assessment of how well
the strategy worked difficult. But itfs ga great theory,h he said, gand can be
an appropriate way to handle these things.h
Eric Cioppa, superintendent of Mainefs Bureau of Insurance, agrees with
Stein. gIn Maine, for the period of time it was operating, it worked very well,h
Cioppa said.
It was active from 2012 through 2013, as 2014 marked the advent of the
Affordable Care Actfs marketplace insurance exchanges. Though in effect only for
a brief period, Cioppa said, the invisible high-risk pool did keep costs down in
the individual market, where Anthem was the largest insurer.
Without the invisible high-risk pool, Cioppa said, Anthem would have
increased rates more than 20 percent, based on estimates the insurer had to
make. Instead, the rates went up less than 2 percent.
But Steve Butterfield, policy director of the
Maine-based advocacy group Consumers for Affordable Health Care, cautioned that
one crucial component that made Mainefs high-risk pool work was that it was
well-funded. The strategy proposed in the House Republicansf American Health
Care Act is not, he said.
gAn analysis that was done on what this program would need showed that it
would need $15 billion to $20 billion per year to have any kind of reasonable
impact on premiums,h Butterfield said.
The GOP bill does allocate about $15 billion to $20 billion — but that is
supposed to last almost a full decade, not per year.
gOne of our concerns,h Butterfield said, gis if the feds are going to put
this in place and only kick in a token amount of money, is it going to be up to
the states to pick up the slack and pay into this thing to make it work?h
Furthermore, Butterfield said, as the law stands now, under the Affordable
Care Act, therefs no need for high-risk pools of any sort. The idea to use
invisible high-risk pools is a solution to a problem that the GOP health care
bill creates. Right now people can buy insurance regardless of their health
status, whether or not they have a preexisting condition. Itfs the GOP bill that
would allow states to opt out of that Obamacare rule.
gI donft understand,h Butterfield said, gwhy it would be a good idea to, on
the one hand, say, eWell, wefre worried about preexisting conditions, so wefre
going to throw not enough money at a problem wefre creating. At the same time,
wefre going to allow insurance companies to charge sick people more.f h
And the invisible high-risk pool, said consultant Stein, is just one small
proposal within the larger health bill.
gTherefs nothing inherently wrong with it,h Stein said, gbut it doesnft
really fix all the other problems of the bill.h
Which, he said, include cuts to Medicaid and potential changes to what are,
under Obamacare, guaranteed gessential benefits.h
This story is part of a partnership that includes Maine Public, NPR and Kaiser Health
News.