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Health Care Law

A New Program Helps the Uninsured Get Coverage

How to qualify and apply for new federal high-risk health insurance pools

Is it true that in the federal program my expenses couldn’t be more than $5,950 in a year?

Out-of-pocket expenses are capped annually at an amount specified by law—currently $5,950 for a single person and $11,900 for a family of two or more. But the phrase “out of pocket expenses” means deductibles and copayments. It does not include premiums.

Can I get coverage for my family under the federal plan?

Every member of your family who meets the conditions (uninsured for six months, having a qualifying medical condition, being a U.S. citizen or legal resident) can apply as an individual. If accepted, each person must pay the premium required according to his or her age group. There are no special rates for family coverage.

Would the federal plan cost less than insurance I could buy through my state’s existing high-risk pool program?

Probably, but not necessarily. The law specifies that premiums for the federal plan can be no higher than the standard premium in the state for individually purchased insurance available to people who are both healthy and unhealthy. In contrast, state high-risk pools—which by definition only have enrollees with preexisting conditions and therefore higher medical costs—may charge premiums considerably higher than this standard. On the other hand, some state pools offer subsidized premiums to enrollees with income below certain levels. Enrollees in the federal plan receive no subsidies, no matter how low their income. So it’s important to compare the federal plan with whatever plans your state already offers.

What if I’m not eligible for the federal program?

If you live in a state that already has its own high-risk pool, you should find out if you qualify for that program. Eligibility rules, costs and benefits vary widely among these state plans. For example, some offer immediate coverage for preexisting conditions, whereas others exclude them from coverage for the first six or 12 months in the plan. And some states do not make it a condition that applicants must have been uninsured for the previous six months. The National Association of State Comprehensive Insurance Plans’ website provides a list of state high-risk pools, with contact information. Some state pools, however, already have a waiting list.

I currently pay for my own insurance, but the cost is crippling me. Can I drop this insurance, wait for six months and then apply for the federal program?

You could, but it would be very risky. Going without health coverage for six months could be disastrous if you suffered a serious illness or injury during that time. But another point to consider is that funding for the federal program in each state is limited, and once the money dries up the enrollment lists will be closed. So if a great many people in your state enroll in this program at the start, there’s a risk that it might not be available to you by the time you become eligible to apply.

What if I enroll in the program but federal funding to my state dries up well before 2014?

Nobody yet knows the answer to this question. Among other reports, the Congressional Budget Office has forecast that the $5 billion funding will “not be sufficient to cover the costs of all applicants” and “will probably be exhausted prior to 2013” if more than 200,000 people across the country sign up. If that happens, people already enrolled in their state’s federal plan would not necessarily see their coverage suddenly end. It’s more likely that the states—which have had to calculate how many people can be covered under the benefit packages they designed—would freeze enrollment and place new applicants on wait lists.

What happens when this program ends?

When the main provisions of the new health care law go into effect on Jan. 1, 2014, the high-risk pool program will become obsolete. You’ll be able to go through a health insurance exchange in your state to choose coverage from a menu of different plan options. Insurers will no longer be permitted to deny coverage based on health status or preexisting medical conditions. If your income is below a certain level, you’ll be eligible for a government subsidy to help you pay the premiums.

Patricia Barry is a senior editor of the AARP Bulletin who writes about Medicare and health policy issues.

 

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