• High-risk pool options: Rocks and hard places

    Nancy Marshall Genzer, by quoting me, highlights a key problem with the interim high-risk pools that started taking applications today. There’s not enough money allocated for them, only $5 billion to get us to 2014. The CBO says that’s only enough for 200,000 enrollees. Based on my 2005 paper on high-risk pools, I think there’s closer to one million likely eligible for them. What to do?

    This isn’t a tough one to solve, but none of the options look so hot politically because they can all be spun as a failing of the law. They’re all rocks and hard places. (OK, maybe one or another is a big bed of thorns–cozy!)

    • Turn away applicants once the money runs out? That’s a lousy thing to do and those folks are pretty sympathetic cases. Imagine the media sob stories (justifiably so).
    • Ask Congress for more money? Are you kidding?! What, just a few years into the fabulous new health reform law and you’re already out of money?!?!
    • Raise premiums on the medically needy? How does that play? Not good.

    Frankly, I’m surprised the Democrats got themselves into this pickle. The high-risk pools are one of the first things the new law creates. You want the early stuff to be successful. You don’t want to have to admit you blew it. Even if they had put $25 billion into the pools that would have hardly changed the total spending in the bill (close to $1 trillion). Why were they so stingy?

    My guess is they’ll sneak a payment increase into some other bill, bury it among all sorts of tweaks, and pay for it with a tiny cut to something else (or claim as much). Nevertheless, it was a silly mistake. Or am I missing something?

    • I live in a world where some think that giving away $25 billion of taxpayers hard earned money is “stingy”….

      You forget that they were playing a number of “games” to try and keep the price tag under $1Trillion – so any more to the pools could have put the bill over that milestone.

      As for remedies – you forgot one – repeal the whole thing and start over….

    • I am not sure what a “medically uninsurable” is – technically everyone can be insured – they just may not be able to afford the actuarially determined rate – my solution would be to focus on access to care – expand walk-in clinics – offer full coverage to diabetics and hypertension patients – the two dominant chronic conditions and expand the VA hospital model [salaried docs and staff] to make care more accessible.

      Reforming a system that is unsustainable in a way that makes it LESS likely to work is not a good solution – it leads to earlier failure – which might actually be a good thing.

      • @LL – There are folks unable to obtain insurance. The high-risk pools are an interim measure to help them until guaranteed issue and illegality of pre-existing condition exclusions is the law of the land. I think they’re worth funding. You’d rather those who would benefit from them do what? There’s nothing in place for them NOW. (Do you know any folks who can’t buy coverage? I do. They deserve better.)

    • Austin,

      One of the thing that you might find surprising about this Libertarian is that I have believed that much of what the “reform” does is actually protect the insurance industry – see today’s WSJ on the MLR problem. I have long felt that we should be spending 85% on health care – and striving for 90.

      It now appears that the administration is baking off of agressive enforcement of the 80% minimum that is in the bill – one of it’s few good provisions IMHO.

      The high risk pools as I understand them take the coverage of the most expensive group and allow the big boys to add significant “overhead”. Moving these folks to some extension of medicare with bettter MLR would save taxpayes significant amounts. Or am I missing something?

      Getting medical costs under control is relatively simple if you can convince two groups that they will be making less money in the future – Insurance companies and medical professionals. Putting Doctors on salaries and keeping them disentangled from their ownership of labs and testing facilities won’t be easy.

      • @LL – You keep writing comments (to this post and others) that seem to suggest we disagree. Maybe we do, but mostly on what is feasible today. Look at your last paragraph! Convince doctors and insurance companies to make less?!? That’s the goal, but it will take a while. I’m trying to suggest things that are feasible in the interim. You’re waiting for utopia. I don’t see why people should suffer while we wait. Are you seriously opposed to the high-risk pools? You do recognize there is no feasible alternative today, right? Politics and power matter. To ignore them is willful ignorance.

    • I have been away for a bit – got some first hand experience with the health care system due to some nasty little blood clots in my lungs – back home now.

      I do think we have one major point of disagreement – your incremental feasible approach runs the risk of being temporary and unsustainable – adding a few billion here and a few billion there to the underfunded programs – like the high risk pool will not be politically easy – and may in fact not be politically feasible.

      I am not for the status quo – or letting the perfect be the enemy of the good – and you are probably right in that we agree more than we disagree in many ways.

      And I follow your blog because I want to learn and better understand – not to be a pain in the ass [which I know I can be]. You have helped me think more clearly in many ways – thank you…

      As for my health care experience….
      1. The “front end” was awesome – the ER and the whole process of figuring out what was wrong with me and what to do about it was an A+. Smart people who rose to the challenge – even on the holiday weekend – we had a diagnosis within 4 hours.
      2. The “back end” was less so – lots of waste – lots of screw ups – good people with good intentions but would be hard pressed to give it more than a C-