Barb Fleming had built a small business selling tableware and wedding gifts. But that career nearly came crashing down around her in 2008, when her doctor found a lump in her breast.
Months later, Fleming, of Bel-Nor, in St. Louis County, would find herself in Missouri's high-risk pool: a pricey, state-managed insurance plan that covered people with pre-existing conditions. The programs were phased out by the Affordable Care Act, but could return in the sweeping health care proposal passed this month by House Republicans.
For Fleming, 57, that's a terrifying proposition.
“I remember when I was first diagnosed, when called my brother. I told him I would probably have to file bankruptcy, and would he help me,” Fleming recalled, choking back tears, sitting at a table covered with copies of old hospital bills. “To me, you’re heading back into those territories for people.”
Risk pools: an old idea, new again
Back when insurance companies could still deny coverage to people with pre-existing conditions, 35 states, including Missouri, had a public plan to subsidize people who couldn’t buy coverage anywhere else: the high-risk pool. Often expensive and underfunded, the programs were phased out by the Affordable Care Act, which forbids insurance companies from denying coverage or charging higher premiums to individuals based on their health status.
The Republican’s plan to repeal major parts of the ACA chips away at these rules. One of the final amendments added to the GOP’s American Health Care Act allows states to waive some protections for people with pre-existing conditions if they are uninsured, and re-establish risk pools to help cover these patients. They would pay higher premiums for a year.
“Our approach says: Don’t force the younge,r healthier person to pay a lot more to cross subsidize the sicker person, because obviously they are not doing that. Let’s have risk pools instead,” Republican House Speaker Paul Ryan of Wisconsin said on a telephone town hall meeting in April.
The idea of a risk pool is to take people with higher health costs out of the general insurance market and subsidize their health spending with public funds and payments from insurance companies.
For Fleming, enrolling in Missouri’s high risk pool at 47 was a last resort. It was 2008, two years before the passage of the Affordable Care Act. Like many self-insured people at the time, Fleming’s coverage was a meager catastrophic plan that had to be renewed every six months. Realizing she would soon lose her coverage, she applied for a low-wage job at a "big box" store that promised insurance after three months. That option evaporated when she became too sick to work. One friend even proposed marriage, so she could get on his plan.
“I felt like I could control the cancer. I had no control over this,” Fleming said. “Because it was absolutely — I felt like — at the whim of whatever that insurance company decided.”
The plan she could get through the high-risk pool started at $820 a month, and wouldn’t cover costs related to her cancer for a year — a common stipulation in state risk pool programs. She successfully appealed to the state’s insurance department to cover her cancer treatment. But in the years that followed, her premiums increased to about $1,200 a month.
Without funding, Missouri’s high-risk pool struggled
Vernita McMurtrey, the executive director of Missouri’s high-risk pool from 2004 until it closed, describes the program this way: It was good coverage, if you could afford it. Most couldn’t.
“High risk pools have higher premiums because they have less choice, less ability to spread the risk,” McMurtrey said in a telephone interview from her office in Kansas City. “There’s no doubt in my mind, whatever is offered to the public through a high risk pool will come at a high cost, and the average person will not be able to afford it.”
Even though insurance companies operating in Missouri paid into the program, the state reimbursed insurers with tax credits. It wasn’t enough.
“What it would have taken back then to make them more effective and to increase enrollment would have been adequate funding,” McMurtrey said. “That didn’t happen then, and it’s not crafted to occur going forward … it’s troublesome to me personally, because I understand how it works.”
Missouri’s risk pool had less than 200 members when McMurtrey took it on. The insurance department did not market the plan, so McMurtrey traveled the state to give presentations to groups. Under her tenure, enrollment grew to more than 6,000 enrollees, she said.
In 2014, the Affordable Care Act’s health insurance marketplaces opened for business, and state risk pools closed around the country.
That year, Fleming purchased a plan for less than $600 a month. For the first time since her cancer diagnosis, she said, she could put money back into her savings account.
Though the Senate is likely to develop its own health care proposal, risk pools may not be entirely out of the picture. The Trump administration recently advised states to use a Medicaid waiver program to establish risk pools, among other things, if options for individual insurance are limited.
Missouri Gov. Eric Greitens’ office did not respond to a request for comment on whether the state would seek a waiver, following an announcement by Blue Cross Blue Shield of Kansas City will pull out of 25 Missouri counties. That will likely leave people in those counties without an option on the health care exchanges this year.
The House GOP’s health care plan
The new risk pools could work differently than they did in the past. Proponents have pointed to the “invisible” high risk pool in Maine, which subsidized insurers for high-cost patients but did not alert enrollees if they were in the pool.
An amendment offered by Rep. Fred Upton, R-Mich., earmarked $8 billion over five years for states to re-establish risk pools or other cost-sharing programs. The money would go only to states that apply to waive the Affordable Care Act’s rule that people cannot be charged higher premiums due to their health status. The higher costs would only apply to patients who are uninsured for more than 63 days in a year, and would last for a year.
States could also apply to use a piece of a $100 billion fund to help stabilize insurance markets, but state governments would have to match the money.
“The real question is, it there enough money,” said Karen Pollitz, a senior fellow for the Kaiser Family Foundation. “It would be more, I think, than states had in the past to work with. But states would have to pony up.”
Republicans argue that the risk pools could help improve choices in the insurance market and bring down premium costs for everyone else. Others say the idea is fundamentally unfair, because people with pre-existing conditions could be priced out of the market. To Pollitz, the issue comes down to how the pool fits within other cuts proposed by the Republican plan.
“While states are dealing with who’s going to be in this market and how could we siphon off the expensive people and pay for them another way, the Medicaid program is getting cut by close to $900 billion over the period,” Pollitz said. “That’s the big fiscal footprint on states.”
The House passed their measure before the Congressional Budget Office released its cost estimate for the bill, but the numbers are now in: the Republican plan would reduce the federal deficit by $119 billion but result in 23 million people losing health coverage by 2026 — just 1 million fewer than their first proposal, which was pulled from the House floor.
In a section that addressed the Upton amendment, the CBO surmised that the availability of funds for risk pools would lead more states to apply for waivers, stripping protections for pre-existing conditions.
“The funding would not be sufficient to substantially reduce the large increases in premiums for high-cost enrollees,” the report reads.
Its authors point to the price tag of temporary risk pools set up by the Affordable Care Act in 2012: $2.5 billion for 100,000 enrollees, over two years. That’s less than half the annual enrollment of the 35 state-based high risk pools in operation before the law.
The measure now goes to the Senate.
Follow Durrie on Twitter: @durrieB
Editor's note: An earlier version of this story misstated Fleming's age.