This article first appeared in the St. Louis Beacon, April 14, 2010 - Missouri is rushing to meet one of the first major tests of the new federal health-reform law by setting up a high-risk insurance pool for people denied affordable health coverage because of pre-existing conditions, such as cancer, diabetes and heart ailments.
This provision is supposed to be in place by July 1, but Missouri health-insurance officials say the federal government has yet to spell out all the rules for setting up the pools.
Meeting the deadline has accelerated the level of activity at the Missouri Health Insurance Pool, also known as MHIP, in Kansas City. Vernita McMurtrey, MHIP's executive director, and her staff, have been meeting nearly non-stop, with each other and with other members of the agency, the governor's office, and the federal Department of Health and Human Services, to clarify the rules for administering the new health law.
"We don't have all the answers," McMurtrey says. "We're waiting for the administration to tell us what this federal pool has to do and what the coverage and services have to be."
One decision Missouri has made, however, is to set up its own pool rather than have the federal government create a pool for it. An estimated 20,000 Missourians are expected to be eligible for the state's new pool.
The big difference between this group and Missouri's existing pool involves people with pre-existing conditions. Currently, the state's pool accepts people with pre-existing conditions -- but they have to wait a year to be eligible for benefits. The new federal program has no waiting period, but enrollees must have been uninsured for six months to qualify for the insurance, McMurtrey says.
Aside from providing insurance, the program may be a test run of the overall health-reform program taking effect in 2014. The pool being set up now is a stopgap until 2014.
Unlike pools in some other states, Missouri's gets no subsidies from state government. The system works this way: Any insurance company in Missouri is required to pay an assessment. That money, along with premiums, finances the coverage. In 2008, Missouri's existing pool had 2,090 enrollees contributing more than $21 million in premiums.
An actuary examines the standard rates charged by about a half dozen insurers doing business in Missouri, then uses that data to set premiums for pool participants. The pool rate also takes into account factors such as age and size of deductibles.
One big challenge for the new pool will be pricing premiums and controlling costs in a pool with so many people with pre-existing conditions. The new federal law says the premiums can be no higher than standard premiums. In other words, people with major health problems will be charged as if they had no serious health problems. The federal government will offset expenses for this temporary national pool by providing $5 billion.
Still, no one knows whether the federal contribution will be enough to set up a fiscally sound program that includes everyone who might seek coverage. McMurtrey and others say it's too soon to know whether the program will accommodate all Missourians who might want to participate.
McMurtrey adds that the average premium for an individual in the existing pool is about $600 a month. (The national average for individual coverage in the non-group market is $458 a month, according to estimates from the Congressional Budget Office.) McMurtrey says Missouri's pool program is "pretty good with broad coverage, a $1 million lifetime benefit and full prescription benefits," depending on the coverage chosen.
Tracy Townsend, a MHIP administrative assistant who has been helping to get this program up and running, was asked whether it was unusual for the agency to have to put a program in place so quickly.
"I think it is, but that's just my own opinion," she says. "We don't really know answers to all the questions yet. There are so many variables. The discussions that have been going on a daily basis with (the federal government) and the governor's office deal with the question of how many people can we get into the pool until 2014?"
MHIP's website says that current high-risk insurance pools in 35 states, including Missouri, provide $2 billion in comprehensive coverage for more than 200,000 people and receive only $55 million in federal funding. The rest comes mainly from insurance premiums and assessments on insurers and on hospitals.
So far, Georgia is the only state that has told Health and Human Services it will refuse to set up its own pool. But MHIP's website says the 35 states with high-risk pools are "ready and eager" to carry out this new law.
Funding for health reporting is provided in part by the Missouri Foundation for Health, a philanthropic organization whose mission is to improve the health of the people in the communities it serves.