High risk pools

While pretty much all proposals at this point favor covering even those with pre-existing conditions (even Governor Jindal!), they don’t go into effect for years.  That means that many people, desperate for coverage right now, will suffer for at least 3 more years until new regulations kick in in 2013.  That’s where high risk pools come in, which would be implemented immediately.

High risk pools already exist in many states.  They are basically subsidized government plans for those who are otherwise uninsurable.  Sounds great, right?  Of course, there is a downside.  Cue Austin Frakt, who has done some work on the topic:

We estimated that high-risk pool premiums were above 25% of family income for 29% of the medically uninsurable population. That is, even when high-risk pool enrollment was possible, for a large minority of medically uninsurable individuals, it was unaffordable. We simulated the effect of lowering high-risk pool premiums to 125% of the individual market rate and found that doing so would increase enrollment by 33%.

The main policy conclusion was that an injection of federal funds, accompanied by appropriate regulation, could dramatically increase the affordability of high-risk pool plans and provide much needed assistance to medically uninsurable individuals.

Yes, we can increase access, but it has to cost money.  Don’t kid yourself; it’s a lot of money.

You should go read the whole thing.  In fact, you should read Austin’s blog The Incidental Economist regularly.  Us academics have got to support each other.

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