As the American Health Care Act makes its way toward potentially becoming law, you've likely been hearing a lot about high-risk pools, a proposed option to give coverage to people with more expensive medical conditions. But how much does insurance cost in a high-risk pool? These pools have been tried before, in the pre-Obamacare days, and premiums varied wildly from state to state.
If the AHCA passes, those costs would likely vary again, depending on how a state chose to set up its pool. But in the past, high-risk pools had a mixed success rate, and insurance costs were often prohibitive for people who most needed care, with premiums sometimes double the cost of what healthier Americans paid while policies offered less coverage.
High-risk pools are a way to separate out the sickest Americans into their own marketplaces, arguably to keep costs lower for healthier people. Although the Affordable Care Act strengthened protections for those with pre-existing conditions, making high risk pools a thing of the past, the AHCA would allow states to apply for waivers from those protections, giving insurance companies the right to take into account the health status of individuals when determining premiums. In order to get a waiver, the state would have to prove that it had set up a high-risk pool to protect those with pre-existing conditions, while the bill would also provide $8 billion to help defray costs. However, analysts say that states could blow through that money relatively quickly.
House Speaker Paul Ryan has been a big proponent of high-risk pools, but let's take a look at how well high risk pools worked in his home state of Wisconsin, prior to the protections of the ACA. According to CNNMoney,
Some 21,000 people were in the state's high-risk pool in 2011. They paid double the premiums of a comparable plan in the individual market — about $450 a month for a 55-year-old — and had an annual deductible of $2,500. But their conditions weren't covered for six months and they had a lifetime benefits cap of $1 million, which sick Americans can burn through very quickly.
On the other hand, in an article for The Washington Post, health care specialist Richard Popper said that when he managed Maryland's high-risk pool, low-income individuals had access to subsidies that could "cut their premiums up to half what healthy individuals paid." Yet he stressed that was not the case when he worked in the California high-risk pool, where individuals paid premiums that were "20 to 37 percent above what healthy individuals paid."
So if the AHCA passes, the cost of insurance in a high-risk pool would depend on how an individual state managed it. Still, it doesn't look great for people needing coverage. A report from the AARP found that, under the AHCA, annual premiums for individuals in high risk pools could get as high as $25,700 in 2019.
In short, proponents of the AHCA may laud the latest amendment to the bill, but the technicalities of it may prove to be far less effective than they believe.