| Governor Chet Culver announced Friday,
Iowa will accept $35 million in federal funds over the next four years to operate its own temporary health insurance plan for high-risk individuals. This step will help cover uninsured Iowans as the country transitions toward implementation of federal health insurance reform.
"Every Iowan should have access to affordable health care," Governor Culver said. "This action is an important first step in reaching this goal. These funds will allow Iowans who have been among the uninsured for extended time periods to get coverage, in spite of health problems and without waiting periods for existing conditions."
Iowa will establish a new pool alongside its current high-risk pool structure that will comply with the federal requirements. Under the terms of the federal funding formula, Iowa will be eligible to receive a grant of approximately $35 million in reimbursements to subsidize the cost of the fund until 2014. The state's next step will be to submit a plan for federal approval.
Here are more details about the program:
Consumers will be eligible for the new pools if they have a pre-existing medical condition and have not had insurance for at least six months.
They will pay premiums that parallel rates being offered by commercial insurers to healthy people on the individual market. Many existing high-risk pools charge such high premiums that many people cannot afford the coverage. Today, high-risk pools in 34 states cover only about 200,000 people.
Individuals who sign up for the new pools also will not have to pay more than $5,950 a year out of their pockets for medical care, according to the legislation.
According to this backgrounder posted at Iowa Independent, the new high-risk pool
could serve more than ten times the number of people could affect many people not enrolled in Iowa's current high-risk pool:
"This is an opportunity for the state to show whether it is ready to put a critical component of health reform - covering people with pre-existing conditions - on a faster track," said Andrew Cannon, research associate for the nonpartisan Iowa Policy Project and author of a new policy brief on the topic.
Cannon said more than 34,500 Iowans could be eligible for Iowa's existing high-risk pool or a new one the state may create if the state chooses to act now. The federal health-reform legislation allocated $5 billion nationally to states to provide temporary coverage as a bridge to full implementation of health reform, which will require all insurance companies to accept applicants without consideration of a person's medical condition by 2014.
Iowa created its high-risk pool program in 1987, now known as the Health Insurance Plan of Iowa (HIPIowa). It serves 2,732 state residents.
High-risk pools such as HIPIowa are designed to help individuals who do not have health insurance through work, do not qualify for Medicaid and cannot afford or qualify for individual coverage because of a pre-existing medical condition. HIPIowa's premiums are about half as expensive as the standard rate for plans sold on the private market, Cannon said, but in many cases those premiums still exceed potential enrollees' ability to pay.
UPDATE: The Des Moines Register quoted HIPIOWA Executive Director Cecil Bykerk and State Senator Jack Hatch as saying federal funding will allow about 1,000 people to be covered in the new high-risk pool before 2014. That's a small fraction of the number of Iowans who might be eligible for the program, according to the Iowa Policy Project's estimate.
The Des Moines Register quoted Rod Roberts and spokesmen for Terry Branstad and Bob Vander Plaats as saying they oppose participation in this new federal program. I don't know how quickly the new pool will be up and running, but I'd like to see the Republican nominee for governor explain to Iowans with pre-existing conditions why they should have to go without affordable insurance coverage until 2014. Remember, the federal government is subsidizing the cost of operating the new pools.
As of April 30, officials in 28 states had informed the federal Department of Health and Human Services of plans to create new high-risk pools, while officials in at least 15 states had declined to participate for fear that federal funds may be insufficient to cover the operation of these pools until 2014.