High Risk Pool Coverage is Extended. A Few More Fixes Needed.
Earlier this year, the Texas Legislature passed a bill to wind down the Texas Health Insurance Pool. The Texas Health Insurance Pool, or “high risk pool,” was created to provide coverage for Texans who were denied coverage due to pre-existing conditions. It has been a lifeline for thousands of Texans for more than a decade, but it has never been an affordable for most because state law sets the premiums twice as high as comparable private market coverage. As we’ve explained previously, the high risk pool will no longer be needed in 2014, when for the first time, the Affordable Care Act prevent people from being denied coverage or charged more due to pre-existing conditions. Texans whose only option is pricey risk pool coverage today will be able to choose from any plan offered by any insurer in Texas for coverage effective January 1, 2014, and they won’t pay more because of their pre-existing condition.
Some risk pool enrollees have already secured coverage for 2014. Cancer survivor Bob Flood and his family paid $3,000 each month for coverage in the risk pool and have enrolled in alternate coverage for 2014 that costs less than $1,000 to cover the family. But not all of the 23,000 risk pool enrollees have enrolled in other coverage. The technology issues with healthcare.gov have kept many people, including risk pool enrollees, from being able to apply for subsidies and coverage in the Marketplace.
The Texas legislation closing the risk pool contains a contingency allowing the Texas Commissioner of Insurance to keep the risk pool open if Marketplace operations are delayed. The Department of Insurance announced on Friday that the pool coverage will be extended until March 31, 2014. This aligns the end of risk pool coverage with the last day for open enrollment in the Marketplace, and gives risk pool enrollees an additional 3 months to get other insurance in place and avoid any gaps in coverage.
Extending pool coverage through March 2014 will provide current enrollees with needed time to get detailed information on their coverage options, make informed choices, and to enroll through the Marketplace. Individuals can also enroll in plans outside of the Marketplace, which do not rely on a functional healthcare.gov website, but the only way low- and middle-income enrollees can secure premiums subsidies is through the Marketplace website or phone line.
Unfortunately, there could be some tradeoffs for enrollees with extended risk pool coverage. Risk pool coverage has high deductibles. The most popular risk pool plan has a $5,000 deductible (for an individual, not a family). Risk pool deductibles re-start each year in January. If an enrollee remains in the risk pool for the month of January, for example, they would face a full year’s risk pool deductible for January, and then start over with a whole new deductible if they select an new plan in February. Meeting two deductibles within one year could prove financially difficult for many enrollees, especially moderate-income ones.
Another issue is premium increases. While most of us are used to once-a-year hikes, premiums historically have increased twice a year in the risk pool so costs remain twice that of regular coverage. It is possible that risk pool rates could increase between now and the end of March.
CPPP and the National MS Society sent a letter to the department last week that outlines the affordability issues related to an extension of risk pool coverage and potential fixes. The board of the Texas Health Insurance Pool will likely meet soon to determine if and how to address these issues. The risk pool has been conscientious about communicating changing information to enrollees, providing accurate and timely updates to its members. I’m certain the risk pool board will thoroughly examine how to make the extension and ultimate transition of coverage work well for risk pool enrollees.
Written by Stacey Pogue, Center for Public Policy Priorities. Cross-posted from Better Texas blog.