Republicans Consider Restoring High-Risk Pools In Obamacare Replacement

Republicans are working on plans to repeal and replace the Affordable Care Act. One of the possibilities that has been put forward, reinstating high-risk pools. NPR's Audie Cornish talked to Ryan Burt, who's been involved with high-risk pools for 25 years and helped establish Minnesota's high-risk pool, one of the oldest and most highly regarded high-risk pool programs in the country.

AUDIE CORNISH, HOST:

We've been looking this week at what we know of plans to replace Obamacare, and one of them aims to spread the burden of caring for the very sick. Here's Speaker Paul Ryan on public TV's "Charlie Rose" show.

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PAUL RYAN: By having taxpayers, I think, step up and focus on, through risk pools, subsidizing the care for people with catastrophic illnesses. Those losses don't have to be covered by everybody else, and we stabilize their plans.

CORNISH: High-risk pools are insurance programs for people who can't get coverage because they have chronic illnesses or disease. Obamacare essentially did away with them when the law banned insurance companies from turning away people with pre-existing conditions. Ryan Burt has been involved with high-risk pools for some 25 years now. Welcome to the program.

RYAN BURT: Thank you. It's a pleasure to be here.

CORNISH: So you helped start Minnesota's high-risk pool and it did pretty well. In California the idea didn't do so well. People actually reportedly died while on waiting lists to get coverage. Can you help us understand kind of, like, what the tipping point is between one doing well and one not?

BURT: Well, I think one of the big issues is funding. The people that use risk pools are sick. They require health care services. And they use a lot of those services. And there's really no way that you could charge premiums high enough to be able to cover those claims costs and yet have anybody be able to afford them. So there's a delicate balancing act between charging premiums that cover a relatively significant amount of the claims that are going to be incurred, but also finding an outside funding mechanism to balance the difference.

CORNISH: Was it cheap coverage? Was it high deductible coverage? Did it cover everything?

BURT: Well, it varied by state. There were some states that controlled premiums to we'll say a relatively affordable level. On the other hand, there were states that in order to try and control costs had more limited benefit sets and had higher premiums along with those.

CORNISH: How do insurers feel about high-risk pools?

BURT: On the one hand, risk pools can play a very good role in helping to stabilize the market. It takes a lot of the very sickest of our friends and family members and provides them with insurance and a special way to fund the claims that are incurred. On the other hand, depending on how the risk pools are funded, a lot of times that expense comes right back to the insurance companies themselves and they're assessed for the additional money required to pay for the claims.

CORNISH: House Republicans want to put $25 billion towards high-risk pools over the next decade. Will this work?

BURT: Risk pool programs do require an outside funding to make them work. They are not a catch-all, be-all, end-all for all individuals that require a lot of health care services, who are very sick. They're really designed to help a smaller segment of that group who generally are employed, who have some means and can afford to pay for the insurance which admittedly is higher than what the average a relatively healthy person just walking around in the street every day would pay.

CORNISH: So is there a chance that there are people who fall through the cracks, Right? Maybe there's a gap.

BURT: That would be true, yep. If, in order to cover those folks, there would be subsidies required and ways to try and make the premiums more affordable for those folks.

CORNISH: Why do you think this idea keeps coming up?

BURT: There's a 30-plus year experience around the country with risk pools, and, again, keeping in mind the narrow focus of what they intended to do. In many cases they were very successful. Are they a be-all, end-all solution to all issues with our health care system - absolutely not. But in terms of offering high quality coverage to a segment of our society that is in dire need of coverage, it's really a godsend.

CORNISH: Ryan Burt is an attorney who works with the National Association of State Comprehensive Health Insurance Plans. Thank you for explaining it to us.

BURT: My pleasure.

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