Pa. submits plan for high-risk health insurance pool

Pennsylvania's Insurance Department announced Wednesday that it had submitted a plan to achieve one of the provisions of the new national health-overhaul legislation: creation of a special insurance program for people who can't buy insurance because they're already sick.

People with preexisting conditions such as heart disease, cancer, or major mental illness would be able to buy into the proposed high-risk insurance pool for about what healthy people would pay, up to $5,616 a year.

The problem is that those payments, plus $160 million in federal funding through 2013, can provide insurance for only about 5,100 people in a state where 800,000 are uninsured. State officials do not know how many people can't buy insurance because of health problems.

"The unfortunate reality is that there are more folks that need the program than what the state can afford to cover," said Melissa Fox, a spokeswoman for the state Insurance Department.

The U.S. Department of Health and Human Services has said it would decide by July 1 whether to approve the plan, said Shelley Bain, policy director for the department. Bain said the program likely would not begin accepting applications until the fall, although the plan calls for the state to begin taking applications as early as August. Members of the pool will be selected on a first-come, first-served basis.

States had the option of letting the federal government administer their high-risk pools or creating their own programs. Thirty-five states already had high-risk pools.

"We believe that we know more about what the people of Pennsylvania need than the federal government does," Bain said.

New Jersey submitted a proposal last week. It already requires insurers to offer plans to people with health problems, but said cost was a problem. It suggested modifying its current insurance system to make use of the federal funding. It didn't specify a proposed cost for people to participate in the program.

Pennsylvania's proposal calls for charging individuals with incomes below 200 percent of the federal poverty level $168 a month. People who make more would pay $468 a month.

The state will seek insurers to administer the plan in much the same way they manage medical payments for self-insured private companies.

Bain said members of the high-risk pool would receive coverage comparable to typical policies in the state. The proposal calls for a $1,000 deductible within a defined network and $10,000 if subscribers go to out-of-network doctors or hospitals. There would be significant cost sharing, including $30 copays for specialists and $20 copays for generic drugs. Patients would be responsible for 20 percent of the cost of many services after paying the deductible.

Abortion was a controversial issue during the overhaul debate. The proposal would not cover elective abortions, although it would cover medical problems resulting from elective abortions.

The program will be available to citizens, nationals, and people who are lawfully present in the United States who have not had insurance coverage in the previous six months and who can prove one of the following: that they have a preexisting condition, that insurance has been denied them because of a preexisting condition, that they can get insurance only if their preexisting condition is excluded, or that coverage was quoted at a "substandard rate" due to a preexisting condition.