Kaiser: History of high-risk pools not encouraging

The American Health Care Act (AHCA) was approved by the Republican-controlled House last Thursday only after an amendment was tacked on the bill that would add $8 billion to a high-risk pool that would subsidize coverage for Americans with pre-existing conditions.

That amendment persuaded enough GOP moderates to support the AHCA, which no longer requires states to mandate that insurers offer coverage to people with preexisting conditions. Instead, a high-risk pool – called the State Patient and State Stability Fund – would be used to subsidize coverage for these consumers.

Under the measure passed by the House, the federal government would provide $130 billion over nine years, plus $8 billion over five years (through the late amendment) for states to offer financial assistance to high-risk consumers and other uses.

But as the Kaiser Family Foundation argues in this video, while high-risk pools may sound good, it’s an idea “that’s very hard to make work in the real world of health care.”

Kaiser notes that before passage of the Affordable Care Act (ACA) in 2010, 35 states had high-risk pools. In addition, a temporary high-risk pool was run by the federal government until 2014 to ease the transition to the new law for individuals with preexisting conditions. According to Kaiser, “none of them worked very well.”

“Both premiums and other costs remained too high for many people with health conditions to afford,” Kaiser says. “The federal program ran out of money almost a year before it was scheduled to end.”

For some states, high-risk pools became so expensive to run that they created waiting lists for consumers with preexisting conditions seeking coverage.

“And often, to keep costs down, risk pools set up waiting periods before they started paying bills for the very illness that made people high risk,” Kaiser says.

While the $8 billion amendment got the AHCA over the top in the House, Republicans hold only a slim majority in the Senate, where only a couple of defections can cost them. Already, Senator Susan Collins, a Maine Republican, has expressed skepticism that the AHCA as passed by the House would protect high-risk individuals because funding may be inadequate.

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