Pennsylvania and 16 other states are handing over their聽 to the federal government Monday.
Consumers enrolled in the so-called high-risk pool, ,听have received letters telling them the transfer is automatic but that they may see 鈥渃hanges to benefits, treatment plans, deductibles and access to provider networks.鈥�
PA Fair Care, which began聽in 2010, is temporary by design. It鈥檚 a federally-funded program that offers insurance to people who otherwise wouldn鈥檛 be able to get it.
Under the federal health law, these pools were intended to serve as a bridge until 2014, at which point insurers will no longer be able to deny people with pre-existing conditions health coverage or charge them more. People will also be able to get insurance from new state-based marketplaces, known as exchanges.
The plans offered through high-risk pools are less expensive than what鈥檚 offered to individuals and small groups on the private market because the government picks up part of the tab. To be eligible, a person must be uninsured for at least six months.
Funds Running Low
The federal government set aside $5 billion for the high-risk pools, with the intent of fully funding them until 2014. Pennsylvania鈥檚 contract was for $160 million, according to the state insurance department. But the road has been bumpy. The pools, which partially subsidize insurance premiums for people often in need of costly medical care, turned out to be more expensive than expected.
In February, the U.S. Department of Health and Human Services聽 that the pools couldn鈥檛 accept new enrollees, effectively shutting out聽 any additional enrollees as of March 1.
Almost 7,000 people were enrolled in Pennsylvania鈥檚 plan at that time, surpassing the original estimate of 5,600 enrollees in 2013. State Insurance Commissioner Michael Consedine wasn鈥檛 pleased with the policy change and urged HHS Secretary Kathleen Sebelius to reconsider the decision.
鈥淪uspending enrollment in March creates a 10-month gap in the availability of health insurance coverage for individuals who would have been served by PA Fair Care 鈥� where are these individuals supposed to go to access coverage?鈥� Consedine wrote. 鈥淚n order to minimize coverage disruptions and allow time to prepare for a successful transition to exchange products, we request that you revert to the previously discussed timetable.鈥�
A 鈥楻egrettable鈥� Decision
In April, PA Fair Care hit another snag. HHS notified states of another contract change, one that in some cases would mean states had to absorb some of the costs of the program.
HHS鈥� new contract offer, effective June 1, would set 鈥渁 ceiling amount on costs that would be reimbursed through the end of the program,鈥� the agency wrote in a letter to states. States not wanting to accept the new terms could turn the pools over to HHS to run. The choice put Pennsylvania in a bind, according to Consedine.
鈥淚n essence, you are asking the Commonwealth of Pennyslvania to either end the program or potentially fund at the state level a current federal program. We respectfully disagree with your two options,鈥� he wrote in a May 10 letter to HHS. 鈥淭he abrupt ultimatum allows no time for the Commonwealth to budget funds even if it could bear such costs for the continuation of this program.鈥�
Ultimately, Pennsylvania decided to make the switch, effective July 1. Notification letters went out to enrollees, and Highmark, the state鈥檚 administrator of the pool, has been working to move enrollees over to the federal pool. State Rep. Matthew Baker, a Republican, wasn鈥檛 happy about the change but said Pennsylvania had no choice, given the state鈥檚 own budget challenges.
鈥淚t鈥檚 regrettable,鈥� Baker said. 鈥淏ut it was unnecessary. If the federal government had kept their promise and pledge to the Department of Insurance and the Commonwealth of Pennsylvania, then we wouldn鈥檛 be in this mess.鈥�
Possible Disruptions?
Michael Keough, chairman of the聽 , a trade group that represents 21 of the state-run pools (not including Pennsylvania), worries about what the transition will mean for enrollees. He said a woman from the Philadelphia area recently contacted him with concerns about her deductible changing and about the lack of clarity from doctors about whether they would accept the new federal PCIP plan.聽
鈥淭his adds this interim step for a population of people who by definition need to have health insurance because they鈥檝e got serious conditions that warrant it,鈥� Keough said. 鈥淪o I think it鈥檚 an unfortunate complication.鈥�
Baker agrees. 鈥淧ennsylvania had a very successful program and obviously it was the preference here in Pennsylvania to not subject Pennsylvanians to possible disruptive impact of having to transition them to a new plan which arguably may require them to change doctors or hospitals,鈥� he said.
In an emailed statement, a spokesperson for CMS said the takeover now will help patients in January: 鈥淭he Pre-existing Condition Insurance Plan has been serving tens of thousands of Americans for several years and continues to provide important coverage to people with few alternatives. These actions will help ensure the program鈥檚 smooth transition to 2014, when the new market reforms will be implemented and insurance companies will no longer be able to deny coverage because of pre-existing conditions.鈥�
The 16 other states making the transition are: Arkansas, California, Colorado, Iowa, Illinois, Kansas, Michigan, Missouri, New Hampshire, New York, North Carolina, Ohio, Oregon, South Dakota, Utah and Washington.
聽is among states that will continue to operate its own pool.聽With 1,500 people in the program, it hasn鈥檛 been as big or as costly as the one in Pennsylvania. New Jersey is one of a handful of states that already prohibits insurers from denying coverage for people due to a health condition.
This story is part of a collaboration that includes聽,听, and Kaiser Health News.