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Week In Review: Details On Health Reform’s High-Risk Insurance Pools And HHS’ Insurance Website

Two of the new health law’s early deliverables – high-risk insurance pools and a federal website for consumers –  took center stage as July 1 marked a busy day in the administration’s implementation schedule. 

Thursday was the day high-risk insurance pools officially opened for business in the 20 states that asked the federal government to to take the lead. USA Today described this initiative as a “key early program … to provide affordable coverage to about 200,000 people with pre-existing medical conditions.” And, though the law mandated the start date to be June 23 (90 days after the law was enacted), HHS chose to tie the launch to the beginning of most states’ fiscal years. Of the 30 states that have chosen to run the pools themselves, about 20 will be ready in early or mid-July and 10 are “working through legislative and other issues that may take weeks or months to resolve” (Young, 6/28).

Though The Associated Press said coverage through high-risk pools will be available for some as early as August 1, making this effort “the most ambitious early investment of President Barack Obama’s health care overhaul,” there’s still a catch: “Premiums will be a stretch for many, even after [$5 billion in] government subsidies to bring rates close to what healthier groups of people are charged” (Alonso-Zaldivar, 6/29). According to the Los Angeles Times, “several independent analyses, including one by the nonpartisan Congressional Budget Office, have estimated that more money would probably be needed because demand will be so high. The Department of Health and Human Services will be able to shift money from states that are not using all their allotted funds to those that need more, but so far administration officials have been reluctant to talk about seeking more funds” (Levey, 7/1).

And, in a separate story, The Associated Press explained that monthly premium prices will range by state and plan design from $140 to $900. Independent experts estimate premiums will average around $400 to $600 a month. “Younger people will pay less” and even very high premiums may be attractive to people who are otherwise unable to obtain any insurance (Alonso-Zaldivar, 7/1).

Also on July 1, the White House launched, which, the administration described as “a ‘one-stop shopping’ place for health insurance,” according to the CBS News.  HHS Secretary Kathleen Sebelius said the site will provide “unprecedented transparency into the health care marketplace” (Condon, 7/1).  NPR reported that the website is meant to guide consumers through the process of securing health insurance (Seabrook, 7/1). 

“Users… will not need to divulge personal information such as their name, address or income. Instead, the site asks a series of questions including age, Zip code, job status and degree of difficulty affording health insurance, then uses a person’s answers to produce a detailed list of potential coverage options from among 5,500 private plans,” explained The Washington Post. And will introduce a “substantial change in the private insurance market,” providing individuals and small-business owners easy access to information about insurance options that, until now, has been difficult to obtain (Aizenman, 7/1).

Kaiser Health News filled in other key details. The website cost $3.5 million to build and it “will work as a bridge to help consumers until 2014 when much of the new law takes effect, including provisions that bar insurers from discriminating against people with pre-existing conditions and establishing new health insurance exchanges, the marketplaces that make it easier for consumers and small businesses buy insurance” (Galewitz, 7/1).

Earlier in the week, HHS began accepting applications for another health reform initiative, the Early Retiree Reinsurance Program. The Hill reports the new law set aside “$5 billion for businesses, unions and state and local governments to use to cover the healthcare costs of their retirees – and their spouses and dependents – who are older than 55 but don’t yet qualify for Medicare. … But some observers doubt the money will last” until 2014, when other parts of the law kick in (Pecquet, 6/29).

(The July 1 Morning Edition has more more detailed news summaries of the high risk pools and the HHS website.)

Indeed, these events represented a flurry of Obama administration reform implementation activity. And results of a Kaiser Family Foundation tracking poll released midweek offered evidence that the effort may possibly be paying off. (Kaiser Health News is a program of the foundation.) The Washington Post pointed to an increase in the overhaul’s popularity from May to June, in which “48 percent of the public had a favorable view of the law in June while 41 percent had an unfavorable opinion.” In May, the tracking poll had found “41 percent favorable to 44 percent unfavorable. … ‘Overall, roughly a third of voters say that a candidate who voted for the health reform law will be more likely to get their vote, a third say less likely, and a third say it doesn’t really matter,’ said the foundation (Hilzenrath, 6/30).

The Wall Street Journal’s Health Blog noted that the “poll also tracks the popularity of the law’s major elements (most of which, it should be noted, haven’t yet taken effect). People of all political stripes generally like the notion of health insurance exchanges (87% overall), tax credits to small businesses (82%) and a filling-in of the Medicare doughnut hole (81%). The guarantee of insurance appeals to 69% of people, but the individual mandate to only 34% – even though it’s difficult to have the former without the latter” (Hobson, 6/30).

Much of the action on the health law will take place beyond Washington, according to Politico. “With the messy politics of health reform, the burden of balancing state budgets and the goal of expanding health coverage, lawmakers at the state level have had mixed reactions.” Some governors have pledged to fight the new law while others are taking steps to speed up its impact and lawmakers in at least 39 states have introduced measure to block aspects of the reform law or to vote on related ballot initiatives in the next election (Haberkorn, 6/29). 

State legal challenges also are moving forward. According to The Washington Post, District Court Judge Henry E. Hudson heard oral arguments Thursday “in a lawsuit filed by Virginia challenging the constitutionality of the federal health-care law.” The judge will decide within 30 days about whether to dismiss the case or “whether Virginia Attorney General Ken Cuccinelli has standing to sue on behalf of Virginia over the provision of the law that requires individuals to purchase health insurance or pay a fine, and whether Congress has the constitutional power to enact that mandate” (Helderman, 7/1).

(For more coverage, read KHN’s Morning Edition Report for June 29.)

July 1 is the beginning of 46 states’ fiscal year. And Congress’ rejection – at least for now – of a package extending $16 billion in extra Medicaid funding and $35.5 billion for jobless benefits has left them struggling to balance their budgets with tax increases, spending cuts and layoffs, The Associated Press reports (Fouhy, 6/28). The Washington Post added context: “With Medicaid and education comprising the lion’s share of state budgets, the cuts are likely to hit key programs. Since the recession began, states have experienced sharp increases in their Medicaid rolls, which are projected to grow by 21 percent between 2009 and the next fiscal year” (Fletcher, 7/1). Stateline reported that the situation is particularly urgent for 28 states that approved budgets based on the assumption that the aid will come. “Virginia already has had to make budget cuts to make up for the fact that the expected Medicaid dollars haven’t shown up yet. That scenario will likely spread to many more states if Congress does not pass the aid extension” (Grovum, 7/1).

That’s why a contingent of state governors came to Washington Wednesday, according to Bloomberg Businessweek. “The federal government increased Medicaid subsidies through this year as part of last year’s economic-stimulus package. More than 30 states had counted on the six-month extension contained in the stalled bill. A reversion to the previous subsidy rate on Jan. 1 would deal a blow to cash-strapped states” (Selway and McNichol, 6/29).

Kaiser Health News examined the Medicaid proposal’s status – as well as one to extend COBRA subsidies – as Congress left town for the July 4 recess (Villegas, 7/2). 

(For additional news summaries read, KHN’s Morning Edition for June 30 and July 1.)