As coverage begins for high-risk uninsured, Connecticut still works to ‘get this right’

WASHINGTON–The federal government announced Wednesday that Connecticut and more than two dozen other states will get millions of dollars over the next three years to create a new health insurance program for people who have been shut out of the insurance market because of serious health problems.

But Connecticut isn’t ready to start accepting applications from prospective patients just yet.

David Dearborn, a spokesman for Connecticut’s Department of Social Services, said the launch of the program, which had been expected today, is uncertain because of a concern that the premiums are too high. Dearborn said he did not know how much those premiums were.

However, a press release sent out Wednesday from the federal Department of Health and Human Services says that Connecticut residents can expect to pay between $436 and $1,485 per month to get insurance under the new program.

That press release was likely “premature because there’s been no decision by the state of Connecticut,” said Dearborn. “There is no decision yet on time frame of when we will be able to offer this to the public.”

Keith Maley, a spokesman for HHS, said, “We expect Connecticut to begin accepting applications in the month of July and the premiums are still being decided.”

The confusion about when and how the program will operate was not what the Obama Administration had in mind as it touted this new benefit, part of the sweeping health care reform law.

Under that measure, Congress established a $5 billion pot of money to create these new “high-risk insurance pools,” designed to provide health coverage for people who have pre-existing health conditions, such as cancer, AIDS, or diabetes, and who have been without insurance for at least six months.

Connecticut is one of more than two dozen states opting to set up its own high-risk pool. Twenty-one other states will allow the federal government to run the high-risk pools for them.

Officials in Washington and Hartford said the conflicting information about when Connecticut’s program would get off the ground would likely be clarified soon.

“We’re considering the next step and the timeframe because we want to get this right,” Dearborn said. “The governor and the [DSS] commissioner do not want to have a program that would prevent the participation and stop people from enrolling” because it costs too much.

“The emphasis here is getting an affordable product as an option for people with pre-existing conditions–not who administers the program or exactly when it rolls out,” Dearborn added.

Lawmakers in Congress included the high-risk insurance provision as a stop-gap measure until 2014, when insurance companies will be barred from denying coverage to customers with pre-existing medical conditions and will be required to charge those patients standard rates.

“This is a bridge that will provide help now … to those who have been locked out of the current health care system by private insurers,” Jay Angoff, director of the Department of Health and Human Services’ Office of Consumer Information and Insurance Oversight, said in a conference call with reporters on Wednesday.

Federal officials estimate that the pools will cover as many as 350,000 people over the next three years. Dearborn did not have an estimate of how many Connecticut residents could benefit from the program. In an email to HHS late Wednesday evening, DSS Commissioner Michael P. Starkowski wrote that the state was “still reviewing the rates developed by our actuary and the potential enrollment based on the extent of the client cost sharing.”

Although temporary, the creation of these pools is seen as a significant step toward putting in place the infrastructure needed for 2014, when so many other provisions of the health reform law will kick in.

“It’s one of the more concrete or tangible changes that people will see right away,” said Karyn Schwartz, senior policy analyst at the Kaiser Family Foundation, a nonpartisan group that conducts health care research and analysis.

Many of the currently 46 million uninsured are people who are very ill but “who have become so frustrated” with being denied insurance or charged exorbitant rates that they’ve simply given up trying, said Stephen Finan, senior director of policy for the American Cancer Society Cancer Action Network. “This is a step toward fixing that problem … and helping some of those who are most critically in need.”

To be eligible for the program, individuals must have a pre-existing condition and must have been uninsured for the previous six months. HHS officials said they expected to start taking applications today for most of these high-risk pools, and patients could gain coverage as soon as Aug. 1. Among the 29 states that, like Connecticut, have applied to operate the program themselves, six are set to start taking applications today, seven will take applications sometime this month, and the rest will begin in August, according to HHS.

Connecticut estimated that its share of the federal kitty for this program would be $50 million over the next 3½ years. Under Connecticut’s proposed plan, the high-risk pool would be managed by DSS and the Health Reinsurance Association, an existing state-run high-risk pool. Only one insurance plan would be offered, United HealthCare’s PPO plan.

Deductibles for patients who choose in-network providers would be $1,250 for an individual and $2,500 per family, according to the state’s application to HHS. For out-of-network doctors, the deductibles would be $3,000 for an individual and $6,000 for a family.

Richard Popper, another top HHS official, said premiums will vary from one state to another, from about $140 a month to as much as $900 a month.

Some analysts have said the $5 billion will not be enough to keep the programs running until 2014, sparking concern that people who enroll in these programs could experience another coverage gap if the funds dry up. But HHS officials said it was premature to try to calculate how long the money would last.

“We will do our best to make sure that amount of insures as many people as possible and does as much good as possible,” said Angoff.

Finan, of the Cancer Society, said the funding issue is hypothetical and not a central problem right now. “Our concern and focus is getting the program up and running and getting people enrolled,” he said. If there are insufficient funds down the line but the programs are successfully, he said, “we will be in a very powerful position to go back [to Congress] and say we need more.”