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State High Risk Insurance Pools

State High Risk Insurance pools are the last resort for the uninsured if they don’t qualify for commercial insurance or government based programs like Medicaid and Medicare. Unlike the employer based or group health insurance market, in most states an insurer can turn you down for individual coverage if you have a serious pre-existing medical condition (e.g., cancer, HIV) that would make you uninsurable. States are not required to have an alternative option for medically uninsurable individuals to access coverage, but most do. A high-risk health insurance pool is the most common way to provide individuals access to coverage. In addition, in many states, high-risk pools serve as the guaranteed-issue purchasing option for individuals who wish to exercise federal group-to-individual insurance portability rights.

According to a study by the Kaiser Commission, premiums for coverage in state high-risk pools cost between 125 and 200 percent of the standard market rate for health insurance.  As of January 2010, state high-risk pool premiums ranged from an average of less than $550/month ($6,600/year) in four states to over $1,200/month (14,400/year) in two states. California, Minnesota and Oregon have their high-risk pool premium costs capped at 125% of the standard market rate for coverage. In thirteen states, premium costs are capped at 200% of the standard market rate for coverage.

The eligibility rules for each state are different. While the information below will give you a general idea of how the programs work, I would strongly advise you to contact your state's insurance commissioner’s office. Enrollment is limited in some states and requirements change.

With the above caveat in mind, there are essentially three categories of eligibility. The Kaiser Family Foundation has a really good breakdown by State under their State Health facts website. See the State High Risk Pool Eligibility Requirements, 2007.

The definitions of the three categories below are from the bottom of that web page.

“Medically Eligible: Typically, people are considered medically eligible or uninsurable if they have been turned down, charged substantially higher premiums, or if they have been offered private coverage with an elimination rider.

HIPAA Eligible: "HIPAA Eligible" individuals are guaranteed the right to purchase individual coverage with no pre-existing condition exclusion periods when they leave group coverage. To be HIPAA Eligible, a person must have had at least eighteen months of prior coverage, not interrupted by a gap of more than sixty-three days in a row, and the last day of prior coverage must have been in a group health plan. In addition, upon leaving group coverage one must elect and exhaust any available COBRA continuation coverage or similar state continuation coverage. A HIPAA eligible individual cannot be eligible for any other group coverage or Medicare, and must apply within sixty-three days for HIPAA coverage.

HIPAA requires all coverage sold in the individual market must be available to eligible individuals, unless insurers elect to make only two policies available. Insurers can designate their two most popular individual market policies for federally eligible people, or they can designate two "representative" policies that are similar to others they sell in the individual market. These policies cannot impose pre-existing condition exclusions, but HIPAA does not limit premiums that can be charged. This is called the Federal Fallback approach.

States can adopt different approaches to guarantee access to non-group coverage to HIPAA eligible individuals and most states have done so. For example, some states require community rating from guaranteed issue HIPAA policies. Many states guarantee access to non group coverage in a high-risk pool instead of in the private health insurance market. These different approaches are called Alternative Mechanisms.

HCTC Eligible: The Health Coverage Tax Credit (HCTC) is a program that can help pay for nearly two-thirds of eligible individuals’ health plan premiums. In general, in order to be eligible for the health coverage tax credit, you must be 1) receiving Trade Readjustment Allowance benefits (TRA), or 2) will receive TRA benefits once your unemployment benefits are exhausted, or 3) receiving benefits under the Alternative Trade Adjustment Assistance(ATAA) program, or 4) aged 55 or older and receiving benefits from the Pension Benefit Guarantee Corporation (PBGC). “

Pre-existing Conditions

The rules for pre-existing conditions get very complicated for those who are not HIPAA eligible. Again, the Kaiser Family Foundations has some guidance here as well. See the State High Risk Pool Pre-Existing Condition Exclusion and Look Back Periods, 2007 Chart for a general idea. 


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