Order Code RL31745
Health Insurance: State High Risk Pools
Updated May 9, 2008
Bernadette Fernandez
Analyst in Health Care Financing
Domestic Social Policy Division
Health Insurance: State High Risk Pools
Summary
In an effort to expand the options for health coverage, 34 states have established
high risk health insurance pools. These programs target individuals who cannot
obtain or afford health insurance in the private market, primarily because of pre-
existing health conditions. Also, many states use their high risk pools to comply with
the portability and guaranteed availability provisions of the Health Insurance
Portability and Accountability Act of 1996 (P.L. 104-191).
In general, high risk pools tend to be small and enroll a small percentage of the
uninsured. As of the end of 2006, 190,462 individuals were enrolled in these pools.
State-established nonprofit organizations typically administer these pools and
contract with private insurance companies to handle day-to-day operations. Although
benefit packages vary across states and plans, they generally reflect health benefits
that are available in the private insurance market. The majority of high risk pools cap
premiums between 125% to 200% of market rates, and pools often are subsidized
through insurer assessments and other funding mechanisms.
Congress has acted in recent years to fund the expansion and operation of state
high risk pools. The Trade Act of 2002 (P.L. 107-210) appropriated a total of $100
million for FY2003-FY2004. With expiration of authorizing legislation for federal
funding set for September 30, 2005, the 109th Congress took up this issue. The
House passed H.R. 4519, the State High Risk Pool Funding Extension Act of 2006,
on December 17, 2005. H.R. 4519 reauthorized federal grants to state high risk pools
and changed the funding formula used for such grants. The act authorized the
following amounts for FY2006: $15 million for seed grants and $75 million for
operational and bonus grants. The Senate passed H.R. 4519 without amendment on
February 1, 2006, and President Bush signed it into law (P.L. 109-172) on February
10, 2006.
As part of the budget reconciliation process, the Senate passed S. 1932, the
Deficit Reduction Act of 2005 (DRA) conference agreement, which provided
appropriations for the grants authorized under H.R. 4519. DRA provided $75 million
for operational grants and $15 million for seed grants for FY2006. The measure also
included conforming language on enactment of H.R. 4519. The House agreed to the
Senate-amended DRA bill on February 1, 2006, and President Bush signed it into law
(P.L. 109-171) on February 8, 2006.
The Centers for Medicare and Medicaid Services (CMS) administers the federal
grant program. The appropriations provided under DRA were used to extend federal
funding for this program. CMS awarded grants to 31 states that experienced
operational losses in 2005. Of those 31 states, 25 also received bonus grants. In
2006, CMS awarded seed grants to five states, and to another five states in 2007.
The 110th Congress took up the issue of extending the federal grant program by
making funding available pursuant to the Consolidated Appropriations Act of 2008
(P.L. 110-161). This report will be updated periodically.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Health Insurance Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Health Policy Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
State High Risk Pools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
General Characteristics of State High Risk Pools . . . . . . . . . . . . . . . . . . . . . 4
Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Premiums and Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Federal Grants to State High Risk Pools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Recent Legislative Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
110th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
List of Tables
Table 1. Operational Grants Awarded to State High Risk Pools, FY2003
and FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 2. Operational and Bonus Grants Awarded to State High Risk Pools to
Cover 2005 Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Appendix. Summary of State High Risk Pools, 2005/2006 . . . . . . . . . . . . . . . . 12
Health Insurance: State High Risk Pools
Introduction
In an effort to expand the options for health coverage and reduce the number of
uninsured, a majority of states have established high risk health insurance pools.1
These programs target individuals who cannot obtain or afford health insurance in
the private market. High risk pools generally cover people who have sought health
coverage in the individual (nongroup) market, but have been denied coverage,
received quotes from insurers that are higher than the premiums offered by the high
risk pools, or received offers from insurers that permanently exclude coverage of pre-
existing health conditions.2
Many states also use their high risk pools to comply with the portability and
guaranteed availability provisions of the Health Insurance Portability and
Accountability Act of 1996 (HIPAA, P.L. 104-191). For eligible individuals moving
from the group to nongroup market, HIPAA requires state-licensed health insurers
to make coverage available to such individuals, and prohibits exclusion of coverage
for pre-existing conditions. Of the 34 states currently operating high risk pools, 28
states use their pools to comply with HIPAA’s portability and guaranteed availability
provisions.3
In general, state high risk pools tend to be small and enroll a small percentage
of the uninsured. At the end of 2006, 190,462 individuals were enrolled in these
pools,4 compared with over 31 million people who were uninsured in states with high
1 National Association of State Comprehensive Health Insurance Plans, Comprehensive
Health Insurance for High-Risk Individuals: A State-By-State Analysis, Twentieth Edition,
2006/2007, 2006. (Hereafter cited as Comprehensive Health Insurance.) For online
information about state high risk pools, see State Coverage Initiatives, “High-Risk Pools,”
at [http://www.statecoverage.net/matrix/highriskpools.htm].
2 A medical condition for which treatment was recommended or received, or medical advice
was sought, prior to enrollment.
3 To comply with these provisions, states may either enforce the HIPAA individual market
guarantees (“federal fallback”), or establish an “acceptable alternative state mechanism,”
such as a high risk health insurance pool. For more information about HIPAA, see CRS
Report RL31634, The Health Insurance Portability and Accountability Act (HIPAA) of
1996: Overview and Guidance on Frequently Asked Questions, by Hinda Chaikind, Jean
Hearne, Bob Lyke, and Stephen Redhead. (Hereafter cited as CRS Report RL31634.)
4 Enrollment for Idaho’s pool is from the end of June 2006. Since Tennessee’s pool was
established in 2007, there is no enrollment data for the state.
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risk pools operating that year.5 However, such limited enrollment reflects, in part,
the narrow focus of these pools: individuals with costly health conditions who seek
coverage in the private market.
Health Insurance Context
High risk pools fill a niche in the health insurance system — a patchwork
system of private markets and public programs designed to meet the needs of
different types of health care consumers.6 In the private health insurance market,
most people get health coverage through the group market. This market provides
health benefits to groups of people that are drawn together by an employer or other
organization, such as a trade union. Such groups are generally formed for some
purpose other than obtaining insurance, like employment.
While most Americans receive their health coverage through the workplace —
as a current employee, a dependent of an employee, or a retiree — some individuals
do not have access to employer-sponsored insurance (ESI). They may be workers
who do not qualify for an offer of health benefits from their employer (e.g., because
the workers have part-time or seasonal employment status), or they may work for a
company that does not provide health insurance at all, or they may be unemployed.
Public programs also are a source of health coverage, but individuals and families
must meet eligibility requirements in order to qualify for benefits. Individuals who
cannot access ESI and are not eligible for public programs may seek health insurance
in the nongroup (individual) market.
Applicants to the individual insurance market must go through robust medical
underwriting — the process by which an insurer considers information about an
applicant and determines (1) whether to offer an insurance policy in the first place,
and (2) the terms of that policy (e.g., the monthly premium). The information that
a health insurer considers may include personal characteristics, such as an
individual’s health conditions, family medical history, and other relevant factors.
Though uncommon, the insurance carrier may ask an applicant to undergo a physical
exam, or provide specimens. In the group market, insurers forgo underwriting in the
traditional sense, that is, reviewing each person’s demographics and medical history.
Instead, an insurer would consider the overall characteristics of the group, and
calculate a premium for a set of benefits that would be charged to each person in the
group, regardless of their individual health status. (For very small groups, insurers
may individually underwrite policies, if permitted by law.)
Federal and state laws restrict somewhat insurers’ ability to reject applications
or design coverage based on health factors in the nongroup market. Nonetheless,
some applicants are rejected from the individual market altogether, others may
receive insurance offers with riders that exclude coverage for a specific health
condition or body part, or others may be charged premiums that are higher than those
5 CRS calculation of uninsured in states with high risk pools. Data source: Current
Population Survey (CPS), CPS Table Creator, at [http://www.census.gov].
6 For a general discussion about health insurance, see CRS Report RL32237, Health
Insurance: A Primer, by Bernadette Fernandez.
CRS-3
in the group market for similar coverage.7 Rigorous underwriting results in an
enrollee population in the individual market that is fairly healthy (three out of four
enrollees report that their health is excellent or very good8), thereby excluding
persons with moderate to severe health conditions from this private market. High
risk pools were designed to assist such individuals who — because of their health
conditions — have very few options for private health coverage.
Health Policy Context
High risk pools appeal to policymakers who prefer an incremental approach to
coverage expansion and reliance on current state oversight of health insurance.9
Supporters of high risk pools contend that states can use their existing regulatory
infrastructure, as well as their knowledge of health care markets, to efficiently insure
previously uninsurable individuals. Supporters also contend that the private,
nongroup market will benefit. They reason that by removing high risk persons from
the individual market and placing them in publicly-subsidized insurance pools,
coverage in the individual market will become more affordable. They argue that
better risk spreading helps to stabilize the market, promote competition, and retain
insurance carriers — earning the support of such organizations.10 Moreover, high
risk pools function as a safety net for the nongroup market by assuring that
individuals have access to health insurance as long as they are able and willing to pay
for it.
Others contend that high risk pools are generally too small and underfunded to
meet the needs of the majority of persons who cannot access health insurance in the
private market. By design, high risk pools experience losses, but federal attempts to
subsidize these losses have been limited. Waiting lists for enrollment are common,
and premiums combined with other cost-sharing requirements can often make the
coverage offered by these pools unaffordable. As a result, some researchers remain
skeptical that high risk pools will be able to substantially reduce the number of
7 M. Pauly and A. Percy, “Cost and Performance: A Comparison of the Individual and
Group Health Insurance Markets,” Journal of Health Politics, Policy and Law, February
2000.
8 General Accounting Office, “Private Health Insurance: Millions Relying on Individual
Market Face Cost and Coverage Trade-Offs,” November 1996.
9 For example, see National Governors Association, Policy Position, “Private Sector Health
Care Reform Policy,” December 14, 2000. Also, see examples from advisory groups and
academia, such as the National Association of Insurance Commissioners, News Release,”
NAIC Applauds Extension of Federal Funding for High-Risk Pools,” July 27, 2005, and M.
Pauly, “How Private Health Insurance Pools Risk,” National Bureau of Economic Research,
Research Summary, Summer 2005.
10 For example, see the National Association of Health Underwriters’ position on high risk
pools at [http://www.nahu.org/government/issues/Risk_Pools/High_Risk_Pools.htm], and
the Council for Affordable Health Insurance’s issue brief on high risk pools at
[http://www.cahi.org/cahi_contents/issues/article.asp?id=489].
CRS-4
uninsured, particularly among those with serious medical conditions.11 With respect
to reducing the number of people without health coverage, consumer groups
generally advocate for expansion of the federal role in providing coverage, whether
through existing public programs or broader health care reform.12
While high risk pools have existed since the mid-1970s, only recently has
Congress acted to support the expansion and operation of high risk pools across the
country. The enactment of HIPAA during the 104th Congress specified state high risk
pools as acceptable mechanisms for complying with the group-to-individual market
requirements. The 107th Congress passed the Trade Act of 2002 (P.L. 107-210),
which appropriated $20 million for FY2003 for the creation of new pools, and $40
million each for FY2003 and FY2004 for the maintenance of existing pools. During
the 108th Congress, the Senate passed S. 2283, the State High Risk Pool Funding
Extension Act of 2004, which would have extended federal funding for the creation
of new state high risk pools, and operation of existing ones. Similar bills have passed
the House and the Senate during the 109th and 110th Congresses (see detailed
discussion under the “Recent Legislative Activity” section).
State High Risk Pools
In 2007, 34 states had high risk health insurance pools. States have a great deal
of discretion regarding the establishment and operation of these pools, including
covered benefits, eligibility requirements, pre-existing condition exclusion periods,
and funding sources. The table in the Appendix presents information about the main
features of each state’s high risk pool.
General Characteristics of State High Risk Pools
Administration. State high risk pools typically are operated through state-
established nonprofit organizations that contract with private insurance companies
to handle daily operational functions. Boards oversee the management of high risk
pools and usually consist of representatives from insurance companies, consumer
groups, health care providers, and state agencies.
Premiums and Funding. In order to limit the cost of health coverage for
persons with costly medical conditions, all states cap high risk pool premiums.
Almost all states have caps between 125% and 200% of standard market rates. A
majority of states offer coverage at less than 150% of the average. Risk pools
11 For example, see D. Chollet, “Expanding Individual Health Insurance Coverage: Are
High-Risk Pools The Answer?,” Health Affairs, October 23, 2002, and Pollitz, et al., “Health
Insurance and Diabetes: The Lack of Available, Affordable, and Adequate Coverage,”
Clinical Diabetes, vol. 23, no. 2, 2005.
12 For example, see testimony presented by R. Pollack, Families USA, Education and the
Workforce Committee Employer-Employee Relations Subcommittee hearing, “Expanding
Access to Quality Health Care: Solutions for the Uninsured,” July 9, 2002, and American
Federation of State, County, and Municipal Employees, “Universal Health Coverage,”
resolution no. 14, June 26-30, 2000.
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generally operate at a loss, “because it isn’t feasible to pool a group of individuals
known to have major health problems and expect their premium contributions to
cover the entire cost.”13 Thus, many state pools tap other sources of funding to cover
their operating expenses.
States may augment premium collection with one or more of the following
sources: assessments on insurers, in some instances combined with offsetting tax
credits; state funds; and other sources.14 Almost all states with risk pools assess a fee
on insurance carriers, although 13 of those states offset those assessments with tax
credits. Eleven states use general revenue for additional risk pool funding, while
only two states use monies from hospital assessments.
Benefits. Although health benefits provided through risk pools vary across
plans and states, they generally reflect coverage that is available in the private
market. States usually offer more than one plan from which enrollees may choose.
Deductibles and other cost-sharing requirements vary from state to state. Most state
pools do not place maximum annual limits on benefits, except for California, Idaho,
Kansas, Louisiana, Tennessee, Utah, and West Virginia. In contrast, nearly all pools
have lifetime maximums on benefits, except for Indiana, Kentucky, and New
Mexico.15
Eligibility. States establish the eligibility criteria for high-risk pools. As noted,
many states allow HIPAA-eligible persons to enroll in their high risk pools. HIPAA
eligibles are persons who do not have or are losing coverage and seeking it in the
individual market.16 They must meet the following requirements: (1) have at least
18 months of “creditable coverage” (specified in statute) without a significant break
in that coverage (63 or more days); (2) most recent coverage must have been through
a group health plan; (3) exhausted federal or state continuation coverage; (4) not
eligible for Medicaid or Medicare; and (5) not have any other health insurance. For
HIPAA eligibles, high risk pools guarantee the availability of health coverage and
prohibit exclusion of coverage for pre-existing conditions. Risk pools also are
designed to address the insurance needs of non-HIPAA-eligible persons with costly
medical conditions. A number of states provide for presumptive eligibility, allowing
individuals to become automatically eligible for high-risk pools if they have a certain
13 Communicating for Agriculture and the Self-Employed, Inc., Comprehensive Health
Insurance for High-Risk Individuals: A State-By-State Analysis, Nineteenth Edition,
2005/2006, 2005, p. 14.
14 An assessment is a tax or fee. Some states fund the losses of their risk pools by requiring
insurers across the state to pay assessments. Generally, the amount of insurers’ assessment
is based on their share of the total premiums sold in the state for each year. Some states also
provide tax credits to these insurers, thus reducing the insurers’ tax liability and enabling
them to recover some or all of their expenditures on the assessments. Under the latter of
these funding mechanisms, the state assumes part or all of the cost burden for the losses of
the risk pools.
15 In KS, annual maximum applies to certain plans. In FL and KY, no lifetime maximums
apply to specified plans.
16 HIPAA also provides protections to certain people who wish to enroll in the group health
insurance market. See the aforementioned CRS Report RL31634 for more details.
CRS-6
medical condition specified under state law. In addition to HIPAA eligibles and
persons with specific conditions, many states allow individuals who have
experienced coverage denials, coverage restrictions, or premium increases to enroll
in high risk pools.
Enrollment. High risk pool participation varies significantly across states,
with enrollment ranging from a high of 29,089 participants in Minnesota to a low of
345 enrollees in West Virginia.17 Among state high risk pools, the enrollment
distribution clusters toward the low end. To illustrate, almost one-third of high risk
pools with 2006 enrollment data had pools below 2,000 participants (10 states), and
two-thirds of state pools had participation below 4,000 (23 states). In contrast, only
six states had more than 10,000 participants. As for new enrollment, all states but
Florida are accepting new participants.18
Federal Grants to State High Risk Pools
With enactment of the Trade Act of 2002 (P.L. 107-210), the federal
government provided funding to state high risk health insurance pools for the first
time. The Trade Act appropriated $20 million in the form of seed grants to be
awarded to states that did not already have a high risk pool but wanted to establish
one. Each qualifying state could receive up to $1 million to support the creation and
implementation of a high risk pool. The Centers for Medicare and Medicaid Services
(CMS) administers the federal grant program.19 In 2003, CMS awarded seed grants
to six states: Maryland ($1 million), New Hampshire ($1 million), Ohio ($150,000),
South Dakota ($1 million), Utah ($52,618), and West Virginia ($1 million).20
The Trade Act also appropriated $80 million to be split evenly over FY2003 and
FY2004 to defray some of the operating losses experienced by states with existing
high risk pools. As mentioned earlier, state high risk pools cap premiums in order
to provide some measure of cost protection for enrollees. Given such caps, the total
costs incurred by these pools generally exceed the amounts collected through
premiums. Therefore, pools need to tap other sources of funding to cover their
operational losses.
Under the Trade Act, each operational grant could cover up to 50% of a pool’s
operating losses for the year. To qualify, each state must have established a risk pool
17 The applicable date for enrollment data varies from state to state. For the newest high risk
pool, Tennessee, no enrollment data are yet available.
18 Data sources: Kaiser Family Foundation, “State High Risk Pool Programs and Enrollment,
2007”, at [http://www.statehealthfacts.org/comparetable.jsp?ind=602&cat=7], and
Comprehensive Health Insurance.
19 For additional information about the grant program administered by CMS, see High Risk
Pool Overview, at [http://www.cms.hhs.gov/HighRiskPools/].
20 Ohio was awarded a grant to conduct a study on the feasibility of creating a high risk pool.
Utah was awarded a grant to modify its existing health plan and become a newly “qualified”
high risk pool.
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that restricts premiums to no more than 150% of the premium for standard risk rates
in the state, offers a choice of two or more coverage options, and has in effect a
mechanism designed to ensure continued funding of losses incurred after the end of
FY2004. However, states may still be able to determine, within federal standards,
how much to charge enrollees in out-of-pocket costs, what benefits to include under
the plans, how long coverage for pre-existing conditions may be excluded, and whom
among otherwise uninsurable individuals will be eligible.
Table 1 shows which states received operational grants for FY2003 and
FY2004, and the funding levels. Nineteen states were awarded operational grants in
FY2003; 22 states in FY2004.21
21 The FY2004 grantees include Massachusetts which operates a reinsurance program for
the non-group market that differs from traditional high risk pools. Nonetheless, the MA
program met the requirements of the federal grant program. For a more detailed discussion
about the MA reinsurance program, see Comprehensive Health Insurance, p. 261.
CRS-8
Table 1. Operational Grants Awarded to State High Risk Pools,
FY2003 and FY2004
Grant amount, FY2003
Grant amount, FY2004
State
($, thousands)
($, thousands)
Alabama
2,826
—
Alaska
542
484
Arkansas
1,928
1,893
Colorado
3,219
3,096
Connecticut
1,597
1,503
Illinois
8,144
7,473
Indiana
3,266
3,358
Iowa
1,107
368
Kansas
1,462
1,297
Kentucky
2,511
2,292
Maryland
—
3,176
Massachusetts
—
132
Minnesota
1,984
1,972
Mississippi
2,066
2,038
Montana
698
621
Nebraska
894
751
New Hampshire
225
532
New Mexico
2,048
1,739
North Dakota
329
293
Oklahoma
2,931
2,731
Utah
—
1,395
Wisconsin
2,222
2,501
Wyoming
—
358
Sources: Centers for Medicare and Medicaid Services, “HHS Awards Grants to Twenty-two States
to Offset Costs of Insurance for Residents Too Sick for Conventional Coverage,” News Release, Oct.
5, 2005; and K. Pollitz and E. Bangit, “Federal Aid to State High-Risk Pools: Promoting Health
Insurance Coverage or Providing Fiscal Relief?,” Issue Brief, Nov. 2005.
Note: Grant amounts are rounded to the nearest thousand.
CRS-9
Recent Legislative Activity
Below are brief descriptions of the most recent legislative activity regarding
federal funding to state high risk pools.
109th Congress
During the 109th Congress, with expiration of authorizing legislation for federal
funding set for September 30, 2005, the House passed H.R. 4519, the State High Risk
Pool Funding Extension Act of 2006, on December 17, 2005. H.R. 4519
reauthorized federal grants to state high risk pools and changed the funding formula
used for such grants. The formula for operational grants was changed to the
following: 40% to all qualifying states in equal amounts, 30% based on state
proportion of uninsured population among all qualifying states, and 30% based on
state proportion of the high risk pool population. H.R. 4519 also allowed operational
grants to cover up to 100% of pool losses. The act also authorized the following
amounts for FY2006: $15 million for seed grants and $75 million for operational and
bonus grants. The Senate passed H.R. 4519 without amendment on February 1,
2006, and President Bush signed it into law (P.L. 109-172) on February 10, 2006.
As part of the budget reconciliation process, the Senate passed S. 1932, the
Deficit Reduction Act of 2005 (DRA) conference agreement. DRA included
provisions that would provide specific appropriations for the grants authorized under
H.R. 4519. Section 6202 of the Senate measure amended the Public Health Service
Act to provide $90 million in appropriations for grants to states for FY2006. DRA
provided $75 million for operational grants and $15 million for seed grants. The
grants are distributed according to existing statutory requirements. This measure also
included conforming language on enactment of H.R. 4519. Pursuant to H.Res. 653,
the House agreed to the Senate-amended bill on February 1, 2006. On February 8,
2006, President Bush signed DRA into law (P.L. 109-171).
The appropriations provided under DRA were used to extend federal funding
for this program. On September 30, 2006, CMS awarded seed grants to five states
that wanted to either to establish high risk pools or conduct feasibility studies:
California ($150,000), New York ($150,000), North Carolina ($150,000), Tennessee
($1 million), and Vermont ($1 million). That same year, CMS awarded grants to 31
states that experienced operational losses in 2005. Of those 31 states, 25 also
received bonus grants, exhausting the entire appropriations for operational and bonus
grants. (Table 2 shows which states received operational and bonus grants for
FY2005.) Because the funding for seed grants was not exhausted with the 2006
awards, CMS gave seed grants to five more states in 2007: District of Columbia
($150,000), Florida ($150,000), Georgia ($150,000), North Carolina ($850,000), and
Rhode Island ($150,000).
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Table 2. Operational and Bonus Grants Awarded
to State High Risk Pools to Cover 2005 Losses
Operational
Total Grant Award
State
Bonus Grants ($)
Grants ($)
($)
Alabama
1,442,972
0
1,442,972
Alaska
790,482
895,640
1,686,122
Arkansas
1,253,047
55,900
1,308,947
Colorado
1,658,396
1,478,373
3,136,769
Connecticut
1,147,452
700,000
1,847,452
Idaho
960,424
0
960,424
Illinois
2,939,767
1,250,000
4,189,767
Indiana
1,926,155
942,000
2,868,155
Iowa
994,340
0
994,340
Kansas
1,031,608
295,000
1,326,608
Kentucky
1,406,506
975,000
2,381,506
Louisiana
1,354,951
992,713
2,347,664
Maryland
1,797,813
1,200,000
2,997,813
Massachusetts
414,569
0
414,569
Minnesota
3,664,879
2,000,000
5,664,879
Mississippi
1,392,593
449,202
1,841,795
Missouri
1,409,440
1,000,000
2,409,440
Montana
1,074,800
729,875
1,804,675
Nebraska
1,273,440
934,097
2,207,537
New
826,355
782,644
1,608,999
Hampshire
New Mexico
1,121,553
950,000
2,071,553
North Dakota
867,573
0
867,573
Oklahoma
1,388,788
1,000,000
2,388,788
Oregon
2,375,581
1,500,000
3,875,581
South Carolina
1,278,624
700,000
1,978,624
South Dakota
785,577
312,851
1,098,428
Texas
7,237,175
2,000,000
9,237,175
Utah
1,162,603
1,250,000
2,412,603
Washington
1,575,759
856,705
2,432,464
Wisconsin
2,672,935
1,750,000
4,422,935
Wyoming
773,843
0
773,843
Sources: Data available at [http://www.cms.hhs.gov/HighRiskPools/Downloads/grant
awardslist1106.pdf].
CRS-11
110th Congress
Pursuant to the Consolidated Appropriations Act of 2008 (P.L. 110-161),
Congress made additional funding available for grants to state high risk pools. CMS
issued a grant notification letter to states on May 1, 2008. It stated that a total of
$49,127,000 would be split to fund operational grants (two-thirds of the appropriated
amount) and bonus grants (remaining one-third).22 Applications are due by June 9,
2008.
22 For additional information, see the funding announcement online at
[http://www.cms.hhs.gov/HighRiskPools/Downloads/Final_FY08_HRP_announcement.
pdf].
CRS-12
Appendix. Summary of State High Risk Pools, 2005/2006
State
Enrollmenta
Eligibility Requirementsb
Funding Sourcesc
Alabama
2,687
Eligible under the Health Insurance Portability and Accountability Act (HIPAA)
Assessments on insurers, offset by tax
credits
Alaska
510
Eligible under HIPAA, Health Coverage Tax Credit (HCTC), state “high risk rules”
Assessments on insurers, offset by tax
credits
Under high risk rules, individual must have experienced at least one of the following:
- Denial of coverage within the last six months
- Has one of the health conditions listed on the risk pool’s website (e.g., AIDS)
- Received insurance riders that substantially restricts coverage
Arkansas
2,951
Eligible under HIPAA, HCTC, state “Resident Eligible” rules
Assessments on insurers, offset by tax
credits
Under the HCTC, persons who meet the federal HCTC requirements may be eligible as:
- “Qualified Eligible”: has 3 months of creditable coverage without a significant break
- “Qualifying Family Members” of HCTC eligible person
- “Standard Eligible”: must submit evidence of one of the following:
- Denial of coverage based on history or existence of health condition
- Cost of health coverage offered in substantial excess of the high risk pool premium
- Coverage under another state’s high risk pool
Under Resident Eligible rules, individual must submit evidence of one of the following:
- Rejection notice for health coverage based on medical history or health condition
- Cost of health coverage in excess of the high risk pool premium
California
7,790
Inability to obtain coverage during the past 12 months due to one of the following:
State funds
- Denial of coverage
- Involuntary termination of health benefits, not due to fraud or non-payment of premium
- Cost of health coverage offered in excess of the high risk pool premium
CRS-13
State
Enrollmenta
Eligibility Requirementsb
Funding Sourcesc
Colorado
5,414
Eligible under HIPAA, HCTC, prior coverage under another state’s high risk pool
Assessments on insurers, state funds
Also eligible if meets at least one of the following:
- Denial of coverage
- Cost of health coverage offered in excess of the high risk pool premium
- Coverage for pre-existing conditions is excluded for more than six months
- Has one of the health conditions listed on the application
Connecticut
2,523
Eligible under HIPAA, HCTC
Assessments on insurers, offset by tax
credits
Small employers (up to 10 employees) can purchase health insurance for their employees
through the state high-risk pool
Florida
367 (closed
Received at least one of the following from two or more insurers:
Assessments on insurers
for new
enrollment
- Denial of coverage
since 1991)
- Health condition exclusion or benefit reduction
- Cost of health coverage offered in excess of the high risk pool premium
Idahod
1,458
Eligible under HIPAA, HCTC
Assessments on insurers, state funds,
carriers’ reinsurance premiums
Also eligible if meets at least one of the following:
- Denial of coverage
- Cost of health coverage offered in excess of the high risk pool premium
Illinois
16,731
Eligible under HIPAA, HCTC, “traditional” high risk pool
Assessments on insurers, state funds
For traditional pool, must have received at least one of the following:
- Denial of coverage based on health conditions
- Cost of health coverage offered in excess of the high risk pool premium
CRS-14
State
Enrollmenta
Eligibility Requirementsb
Funding Sourcesc
Indiana
7,050
Eligible under HIPAA, HCTC
Assessments on insurers, state funds
Also eligible if insurer denied comparable coverage
Iowa
2,133
Eligible under HIPAA, HCTC
Assessments on insurers, offset by tax
credits
Also eligible if meets at least one of the following:
- Denial of coverage within last nine months
- Health condition exclusion or benefit reduction
- Cost of health coverage offered in excess of the high risk pool premium
- Has one of the health conditions listed in program brochure
Kansas
1,718
Eligible under HIPAA, HCTC
Assessments on insurers, offset by tax
credits
Also eligible if experiences at least one of the following:
- Termination of coverage (not for non-payment of premium)
- Denial of coverage due to health conditions by two insurers
- Cost of health coverage offered in excess of the high risk pool premium
- Offer of insurance subject to permanent exclusion of a pre-existing health condition
Kentucky
3,947
Eligible under HIPAA
Assessments on insurers, state funds
Also eligible if meets at least one of the following:
- Participation in state Guaranteed Acceptance Program (GAP)
- Has one of the health conditions specified in statute (e.g., leukemia)
- Denial of coverage comparable to pool’s coverage
- Cost of health coverage offered in excess of the high risk pool premium
Louisiana
1,078
Eligible under HIPAA
Assessments on insurers, state funds
Also eligible if moving from another state’s high-risk pool, or state resident who is not eligible
for any health insurance coverage, Medicare, or Medicaid
CRS-15
State
Enrollmenta
Eligibility Requirementsb
Funding Sourcesc
Maryland
10,140
Eligible under HIPAA, HCTC, “Medically Eligible” rules, moving from another state’s high-
Hospital assessments
risk pool
Under Medically Eligible rules, individual must meet at least one of the following:
- Denial of coverage due to health conditions
- Offer of insurance subject to restriction or exclusion of a specific health condition
- Cost of health coverage offered in excess of the high risk pool premium
- Has one of the qualifying health conditions
Minnesota
29,089
Eligible under HIPAA, HCTC
Assessments on insurers, state funds
Also eligible if meets at least one of the following:
- Denial of coverage due to health conditions within last six months
- Notice of benefit reduction
Mississippi
3,867
Eligible under HIPAA, moving from another state’s high-risk pool
Assessments on insurers
Also eligible if rejected for coverage similar to pool’s coverage
Missouri
2,947
All state residents who meet the following requirements:
Assessments on insurers, offset by tax
credits
- Not eligible for coverage, or has coverage with premiums exceeding 300% of standard rates
- Involuntary termination of coverage (not for non-payment, fraud or other specified
circumstances)
Montana
3,136
Eligible under HIPAA, HCTC, “Association (Traditional) Plan” rules
Assessments on insurers, offset by tax
credits
Under Association Plan rules, must meet at least one of the following within the last six months:
- Denial of coverage from at least two insurers
- Offer of coverage with a restrictive rider or coverage limitation for a pre-existing condition,
from at least two insurers
- Has one of the qualifying medical conditions
- Cost of health coverage offered is more than 150% of the average rate used to calculate risk
pool’s premium
CRS-16
State
Enrollmenta
Eligibility Requirementsb
Funding Sourcesc
Nebraska
5,293
Eligible under HIPAA, HCTC, qualifying health conditions
State funds
Also eligible if denied coverage within the last six months, and meets one of the following:
- Offer of coverage with a coverage limitation exceeding 12 months
- Cost of health coverage offered in excess of the high risk pool premium
New
879
Eligible under HIPAA, HCTC
Assessments on insurers
Hampshire
Also eligible if meets at least one of the following:
- Denial of coverage due to health conditions
- Offer of coverage with a coverage limitation for a specific condition
- Cost of health coverage offered in excess of the high risk pool premium
- Has one of the qualifying medical conditions
New Mexico
2,951
HIPAA eligible
Assessments on insurers, offset by tax
credits
Also eligible if experiences at least one of the following:
- Denial of coverage
- Offer of coverage with a coverage limitation
- Has one of the qualifying medical conditions
- Cost of health coverage offered exceeds 125% of the high-risk pool premium
- Transfer from the New Mexico Health Insurance Alliance
- Involuntary coverage termination due to:
- Insurer no longer issuing coverage
- Moving from another state’s high-risk pool
- Current coverage not valid in NM
CRS-17
State
Enrollmenta
Eligibility Requirementsb
Funding Sourcesc
North Dakota
1,631
Eligible under HIPAA, HCTC
Assessments on insurers, offset by tax
credits
Also eligible if provides evidence of at least one of the following within the last 180 days:
- Denial of coverage due to health conditions
- Offer of coverage with a substantial coverage limitation
- Cost of health coverage offered in excess of the high risk pool premium
- Has one of the qualifying medical conditions (e.g., Alzheimer’s)
Oklahoma
2,435
Eligible under HIPAA, HCTC
Assessments on insurers
Also eligible if denied coverage by at least two insurers
Oregon
14,860
Eligible under HIPAA, “Medical eligibility” rules, moving from another state’s high-risk pool
Assessments on insurers
Under medical eligibility rules, individual must meet at least one of the following:
- Denial of coverage due to health conditions
- Insurance agent refusal to apply on behalf on individual due to individual’s health
conditions
- Offer of coverage with a substantial coverage limitation
- Offer of coverage with plan choice limitation
South
2,347
Eligible under HIPAA, HCTC
Assessments on insurers, offset by tax
Carolina
credits
Also eligible if meets at least one of the following:
- Denial of coverage due to health conditions
- Offer of coverage with a coverage limitation exceeding 12 months
- Cost of health coverage offered exceeds 150% of the high-risk pool premium
South Dakota
693
Eligible under HIPAA
Assessments on insurers, state funds,
provider payment reductions
CRS-18
State
Enrollmenta
Eligibility Requirementsb
Funding Sourcesc
Tennessee
Enrollment
Eligible if meets the following criteria:
Assessments on insurers, state funds
data for new
program not
- Denial of coverage due to health conditions or claims history
yet available
- Uninsured for 6 months
- No access to insurance
- Exhausted continuation coverage (including COBRA)
- Age 19 or older
Texas
28,206
Eligible under HIPAA, HCTC
Assessments on insurers
Also eligible if meets at least one of the following:
- Denial of coverage due to health conditions
- Insurance agent documentation of inability to obtain coverage due to health conditions
- Offer of coverage with a coverage exclusion for a specific condition
- Cost of health coverage offered in excess of the high risk pool premium (expires 12/31/05
due to statute change)
- Has one of the qualifying medical conditions (e.g., ALS/Lou Gehrig’s Disease)
Utah
3,344
Eligible under HIPAA, moving from another state’s high-risk pool
State funds
Also eligible if denied coverage within 30 days of application to risk pool
Washington
3,266
Denial of coverage due to health conditions
Assessments on insurers, other funding
Also eligible under “Medicare plan eligibility” rules by meeting at least one of the following:
- Rejection by carrier or use of non-uniform health screen
- Increase in premium
- Offer of coverage with a coverage restriction
- Pre-existing condition exclusion period that is different for standard enrollee in the same
plan
CRS-19
State
Enrollmenta
Eligibility Requirementsb
Funding Sourcesc
West Virginia
345
Eligible under HIPAA, HCTC
Hospital assessments
Also eligible if meets at least one of the following:
- Denial of coverage due to health conditions
- Cost of health coverage offered in excess of the high risk pool premium
- Has one of the qualifying medical conditions
Wisconsin
18,073
Eligible under HIPAA, Medicare (due to disability), HIV+ health status
Assessments on insurers, offset by tax
credits, provider payment reductions
Also eligible if meets at least one of the following within the last nine months due to health
conditions:
- Denial or cancellation of coverage
- Notice of substantial coverage limitation or reduction
- For currently insured, notice of 50% or more increase in cost of coverage
- Notice of 50% or more increase in cost of health coverage applied for
Wyoming
603
Eligible under HIPAA
Assessments on insurers, offset by tax
credits
Also eligible if meets at least one of the following:
- Denial of coverage due to health conditions
- Cost of health coverage offered in excess of the high risk pool premium
- Offer of coverage with coverage restriction or coverage exclusion for pre-existing condition
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Sources: Kaiser Family Foundation, State Health Facts, High Risk Pools, at [http://www.statehealthfacts.org/comparecat.jsp?cat=7], and National Association of State
Comprehensive Health Insurance Plans, Comprehensive Health Insurance for High-Risk Individuals: A State-By-State Analysis, Twentieth Edition, 2006/2007, 2006.
Note: The funding sources, eligibility criteria and rules pertaining to pre-existing condition exclusions may vary by risk pools for those states that operate more than one risk pool.
a. Enrollment numbers are from the end of 2006, except for Idaho (enrollment at the end of June 2006).
b. State residency is an eligibility requirement for all high risk pools.
c. All states collect premiums from pool participants to provide partial funding for pool operations.
d. Idaho’s pool is a reinsurance pool where commercial carriers underwrite the coverage and directly provide health benefits to pool participants. This is in contrast with a traditional
high risk pool, where the pool itself acts as the plan administrator, paying claims and providing benefits to enrollees. Nonetheless, Idaho was included with the more-traditional
state pools because of the similarities in eligible groups (e.g., HIPAA eligibles), and benefits and plans offered