By Sam Langheim
As we tally the days of a Trump Presidency with a Republican controlled House and Senate the issue of the Affordable Care Act (ACA) has become increasingly murky. Democrats are trying to make do with what little power they have to halt all efforts to “repeal and replace” the ACA while Republicans cannot seem to agree on a replacement. The more I hear of Republicans plans for “repeal and replace” the more confused I get. One of the most troubling questions that continued to come to mind was whether or not Republican’s have a potential replacement plan of the ACA and what does this replacement entail?
On January 12th Speaker of the House, Paul Ryan, gave his thoughts on the issue of the ACA during a town hall meeting with CNN. A clip, that quickly went viral, shows Ryan responding to a question of why he would repeal the ACA without a replacement. He proposed the U.S. use state high-risk pools for the uninsured and those with preexisting conditions, citing that in his own state of Wisconsin this was a very successful system.
Come March we will see just how much power Republicans now currently hold; unfortunately it seems the ACA’s days are numbered. Coming to terms with the reality of a republican dominated congress and executive, I figure it is only fair I hear Paul Ryan out. The question I had on my mind: “Do state high-risk pools actually work for the ‘uninsurable’?”
Before trying to understand whether high-risk pools truly worked as an alternative for those with preexisting conditions lets lay down some basics about these pools first.
State high-risk pools are self-funded insurances plans organized by state governments, which serve to insure those denied by insurance plans within the private market. According to the Journal of Insurance Regulation, these high-risk pools are funded by “assessments on health insurers that are proportional to their market shares.” Any pool financial losses that may occur are paid either by general revenue funds or taxes made with a focus on funding high-risk pools.
Enrollment in state-pools are completely subject to the demand for such programs in each state and have often yielded better results in states with smaller populations. These programs often lie square on the shoulders of the states that have them. Although there are many aspects of high-risk pools that remain constant from state to state, these plans often vary from each other slightly depending on each state’s individual needs.
Before the ACA high-risk state pools were seen in 27 states across America. These programs were seen in both “red” and “blue” states as a response to those who were “uninsurable”. A majority of enrollees are middle class and acceptance into these pools usually requires proof of rejection from other insurance companies and proof of residence in each state. It is important to keep in mind that, as stated earlier, although there are constants in how state high-risk pools work these plans come in many slightly different varieties depending on each state’s requirements.
Now the question remains, do these state high-risk pools actually work? In 2008 a study was conducted by the University of Kansas took 416 enrollees in the Kansas high-risk pool with that same central question in mind. These enrollees suffered from conditions ranging from diabetes, cancer, back pain, spinal disorders, mental illness, cardiovascular conditions, and morbid obesity. The criteria for participants in the study were, as follows: a) at least six months of member ship in the state’s high-risk pool, b) age 18-60, c) working at least 40 hours per month, and d) experiencing a potentially disabling health condition as listed in Social Security Administration (SSA) guidelines. The participants of this study began receiving benefits from high-risk pools on April 1, 2006 and the results of the study were concluded on September 30, 2009.
So what did the study find? Due to the high out-of-pocket costs for medical services 26% of the study participants faced financial hardship and debt. Many who cited having debt reported that this was due to high deductibles, high coinsurances, and services not covered by their plans. In addition, 20% reported having medical needs that had little to no coverage under these plans. Participants also reported that high out-of-pocket costs would deter them from seeking wellness and preventative services such as Pap smears, mammograms, colonoscopies, and a variety of blood tests. More than half of the participants reported dissatisfaction with the high-risk pool coverage, because of the heavy financial burden that came from high out-of-pocket costs, high premiums, and limited coverage.
The authors of this study, Hall and Moore, concluded that state high-risk pools “in their current role as ‘the coverage of last resort’ and without broad federal financial support or regulation, these high-risk pools are limited in their ability to provide the coverage needed by many of their enrollees to access services that might prevent their chronic illnesses from becoming disabling.”
Well, so much for hoping. As I conducted my research I tried to be as open minded and unbiased as possible. After all it’s no secret that the ACA has its issues, even Democrats can admit that. Because of my limited amount of knowledge regarding health insurance I thought I may have walked out of this endeavor surprised and willing to embrace a “repeal and replace” so long as the replacement was better. Out of the jumbled mess of proposals that Republicans have for replacement, high-risk state pools seem to be a favorite for them, but evidence indicates not only do these plans not guarantee coverage for the uninsured, they also lead to many of those who are on these plans to fall into debt and eventually default to disability programs funded by the federal government.
It is difficult for an average citizen like myself to understand why Republicans are going through so much trouble to repeal a system that has its flaws but by in large works. Whether it’s the fact that Obama’s name is engrained in the ACA or the fact that repealing it would involve huge tax cuts for the super-rich, Republicans have to understand that their plans for health care moving forward will be traced with intense scrutiny. They are now more powerful than ever and would do well to tread lightly, if the ACA is repealed with a less effective plan or simply repealed with no replacement at all the fallout for their party would be devastating.
Hall, J. P., & Moore, J. M. (2008). Does high-risk pool coverage meet the needs of people at risk for disability? Inquiry, 45(3), 340-352. Retrieved from https://search.proquest.com/docview/58789734?accountid=100
Browne, M. (1997). Health insurance for the “uninsurable”: State high risk pools. Journal of Insurance Regulation, 15, 524-539. Retrieved from https://search.proquest.com/docview/59769715?accountid=100
Yglesias, Matthew. “The Hidden Reason Republicans Are so Eager to Repeal Obamacare.”Vox. N.p., 17 Jan. 2017. Web. 19 Jan. 2017.
“CONSUMER GUIDE TO HIGH-RISK HEALTH INSURANCE POOLS.” National Association of Health Underwriters. N.p., n.d. Web.