A new option for high-risk uninsured becomes available

People with pre-existing medical conditions can sign up for a new, less expensive health insurance option starting next week–but advocates question how effective it will be in getting coverage for the state’s uninsured.

The new plan–a product of the new federal health reform law and $50 million in federal subsidies– will provide essentially the same coverage as the four existing state-run plans, the cost will be less and require a shorter waiting period to cover pre-existing conditions, said Karl Ideman, president of the Connecticut Health Reinsurance Association, which administers the existing high risk plans and will run the new plan that begins accepting applications Monday.

“The benefits are substantially the same,” he said.

A breakdown of what benefits will and will not be covered, and at what cost, was not immediately available, but state Department of Social Services David Dearborn said a benefits chart will be posted on the DSS website by Sunday. He said the plan will pay 80 percent of costs for covered services provided by in-network doctors, with a deductible of $1,250.

The monthly premium for the new plan will start at $285 for adults under the age of 30 years old and increase to $777 for those 60 to 64 years old. There are no gender differences. Coverage for all conditions will be available immediately. However, to be eligible, applicants must have been without insurance for at least six months.

The least expensive health plan administered by HRA starts at $373 for men and $725 for women under age 30, and increases to $1,618 for men and $1,371 for women ages 60 to 64. That does not cover any health care costs associated with a pre-existing condition for the first 12 months.

But health care advocates say despite the lower cost, the new Connecticut Pre-existing Condition Insurance Plan has many of the same drawbacks as existing coverage options.

“Waiting periods create a major barrier to receiving needed health care services,” wrote Tanya Schwartz, a policy analyst with the Kaiser Family Foundation, said in a study of high-risk pools earlier this year. “The primary reason people seek coverage through a state high-risk pool is because they cannot obtain affordable coverage for their pre-existing conditions in the individual market. For people with serious chronic conditions, going without care for a period of time can be detrimental to their health.”

Ellen Andrews, a health advocate and executive director of Connecticut Health Project, said the new plan will not solve the problem of the uninsured.

“It’s just one more lousy option among some really lousy options,” she said. “It’s only a little less expensive. I am not convinced this is going to be helpful for anyone.”

Andrews said the hundreds of clients that call her organization each year seeking directions to affordable health care will likely still be unable to afford this coverage.

The Connecticut Health Care Advisory Board estimates that 335,000 people in the state, more than 10 percent of the population, are currently without insurance. It is unclear just how many of those are without insurance have a pre-existing condition.

Christine Vogel, special adviser to Gov. M. Jodi Rell on Health Care Reform, said earlier this year the average cost for someone to join one of the HRA plans is $20,000 a year. Under the new plan, the premium cost for a person age 64 would be $9,324.

Ideman says there are currently 1,951 people with pre-existing conditions enrolled on HRA plans. He said the highest enrollment since the state began offering high-risk plans has been under $2,500.

Dearborn said he is unsure how big of a spike in enrollment these reduced rates will generate, but DSS is budgeting for 1,200 additional people a month.

“The affordability is going to increase participation. Just how much? I don’t know,” he said.

Dearborn said there would be no enrollment limit on the new program–as long as the federal money holds out.

“If they are qualified for the plan and they choose to enroll, then yes, they can enroll as long as the appropriation lasts,” he said.

There has been some concern whether the $50 million the state will receive to subsidize the plan will last until 2014, when the federal health exchange will provide new options of coverage for those with pre-existing conditions.

A payment cap of $1.5 million for how much this new plan will cover throughout a person’s lifetime will remain, Dearborn said.

“How long this is going to last is a concern,” said Andrews.

Dearborn did say there is a “critical mass of people we need to enroll to make the premium structure work.”

The state originally was given rates from actuaries of $436 to $1,365 a month for the coverage, but was able to get lower rates by grouping the individual plans to disperse the risk for the insurance companies, Dearborn said. The reduction in premiums did not come at the expense of higher deductibles or reduced coverage, he said.

This initial cost estimate caused the Rell administration to delay plans to begin accepting applications on July 1 and reevaluate if the state should take the option of having the federal government run the plan. About half of the states have done that; premiums under the federal plan range from $140 a month to $900, depending on age.

In the end, and after negotiations with the federal Department of Health and Human Services resulted in lower premium rates, the state decided to run the plan itself and will begin accepting applications Monday. Coverage will begin Sept. 1.