Yamileth Medina

What Is The Federal High-Risk Health Insurance Pool?



Posted: Monday, April 05, 2010

by Yamileth Medina
VitalOne Health

Health insurance reform seeks to help those who are uninsured due to a pre-existing condition. Those people may find it very difficult to find coverage on the private market. Beginning in 2014, health insurers will no longer be allowed to deny coverage to individuals based on their health status. While heartening, what does that do for those in need now?

That's where the soon-to-be-established federal insurance pool comes in. People with pre-existing conditions who have gone without health insurance for six months or more by the end of June will be eligible. Proponents believe that it will help make premiums less expensive.

There are several mechanisms by which the pool should increase access to affordable health insurance. Most importantly, it allows consumers to band together as a large group in order to negotiate lower rates. There will be somewhat of a volume discount involved, since insurers will be able to spread the risk of coverage among a larger population.

In addition, premiums will be calculated based on the "standard", most likely healthier, population. Most high-risk pools are based on a more expensive population. According to the legislation, no more than 35% of the benefits will be paid for by the consumer.

Congress also set aside $5 billion in subsidies for the program, intended to last until the program is phased out after the other restrictions take effect. Unlike high-risk pools in 35 states--which are smaller, due to the limits of their states' populations--there are no waiting periods or lifetime limits. Although Medicaid is often available in these situations, it is only available for those under certain income levels. There will be no such restriction with the new federal pool.

Out of pocket health insurance costs (excluding premiums) will also be limited. Individuals will not have to pay more than $5,950 annually. Families, meanwhile, will have their out-of-pocket expenses capped at $11,900 per year. Those are still expensive figures, but may be preferable to the previous alternatives.

(Image: kretyen under CC 3.0)

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Yamileth Medina is an up and coming expert on Health Insurance and Healthcare Reform. She aims to help people realize that they can find quality health insurance plans right now. Yamileth lives in Miami, FL.. Yamileth enjoys listening to music, as well as spending time with family and friends. She lives in Miami, Florida.
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