Health Reform Reality Kicks In: Costs Still High

(WOMENSENEWS)–Antoinette Kraus worries that some eligible women may not tap the new insurance pools that have started taking effect for people with pre-existing conditions in the first phase of health reform.

"Uninsured people are difficult to reach," said Kraus, lead organizer with the Philadelphia Unemployment Project, a longstanding advocacy group for low-income and unemployed people. "A single, unemployed woman who lives alone and only seeks medical care when she has a health emergency may be unaware that she could qualify for a policy that would give her access to physician visits, medications and other treatments she needs to stay healthy."

The Congressional Budget Office estimates that as many as 4 million individuals are eligible for coverage, but only 3,600 women and men applied during July, the first month of operation of the high risk pools. The Department of Health and Human Services predicts that 200,000 to 400,000 will enroll over the next three years.

But the problem of accessing the new pools may go beyond public awareness. For many low-income women the insurance may simply cost too much.

During the battles over health care financing overhaul, advocates for women’s health strongly supported these "high-risk pools" since they would help people with chronic conditions such as multiple sclerosis, rheumatoid arthritis and diabetes, which afflict more women than men. Their focus, however, was on 2014, when insurance companies will no longer be permitted to deny coverage based on medical history and states would create exchanges where people will shop for coverage and be eligible for financial aid to pay premiums.

The stop-gap, four-year program now taking effect with a total federal budget of $5 billion was left largely on the sidelines.

Higher Premium Charges Not Allowed

By law, the transitional high-risk pools cannot charge higher premiums than the standard premiums for healthy people in the state.

"This is an improvement because people who applied for insurance in the individual market often had to pay 125 percent of the standard premiums or more," said Julie Sonier, deputy director of the State Health Access Data Assistance Center, a research organization of the School of Public Health of the University of Minnesota in Minneapolis-St. Paul. "But the premiums may still be too high. Unlike Medicaid, eligibility for the high-risk pools is not based on income."

The most likely beneficiaries of the temporary program will be people with pre-existing conditions who have been unable to find an insurance company willing to sell them a policy, even though they can afford the premiums, predicts Sean O’Neail, vice president of the New York-based National Multiple Sclerosis Society.

"Women often have trouble affording premiums because they are more likely to work part-time or be unemployed and have fewer financial assets than do men," said O’Neail.

He explains how one chronic condition can hurt finances: "Multiple sclerosis–which affects twice as many women as men–strikes people in their 20s and 30s when they are building careers, leaving them with little money to pay physicians’ fees or buy medications that are highly effective but costly."

To afford their care, 21 percent of people with multiple sclerosis spent less on food, heat and other necessities in 2007, a National Multiple Sclerosis Society survey found.

Depending on the state, premiums range from $140 to $900 a month for citizens and legal residents with HIV, cancer and other pre-existing conditions who have had no insurance for at least six months.

"The typical applicant in our area will pay $233 a month for a policy with a $1,000 deductible," said Kraus, at the Philadelphia Unemployment Project.

Pennsylvania received $160 million in federal funding to provide insurance for about 3,500 people, according to the Pennsylvania Health Access Network, a coalition of trade and advocacy groups that has launched a public awareness campaign.

Maternity Care Covered

Maternity care is covered, which is a major advantage for women with diabetes, hypertension and other conditions that make pregnancy and childbirth risky, said Kraus.

There is also no waiting period for enrollment, making policies attractive to individuals who have been recently diagnosed. Thanks to the high-risk pools, they can obtain treatments in the earliest stages when the disease is most curable or manageable.

"On the other hand, older people and smokers may have difficulty affording the premiums because states are permitted to charge them higher rates," said Kraus. "Premiums for people in their early 60s can be as much as four times higher than for people in their 20s, which can be a major disadvantage for older women with low incomes who are trying to save for retirement."

Twenty-nine states and the District of Columbia are administering their own plans using the federal funds, which are allocated on the basis of the state’s population, health costs and number of uninsured residents. The federal government is managing the pools in the remaining 21 states.

Premiums also vary widely because states are permitted to charge higher premiums in areas where the cost of health care is higher, such as major cities; costs are lower in small towns and rural areas.

But high deductibles–as much as $2,500 in some of the plans offered Washington State, for example–could fail to solve the problem of pre-existing conditions.

‘Prohibitive Expense’

"The federal government has set a limit of $5,950 for out-of-pocket expenses in 2010, which can be prohibitively expensive for low-income people who have conditions like rheumatoid arthritis," said Dr. Joseph Flood, a board member of the American College of Rheumatology, an organization of 7,000 specialists in arthritis care and research, based in Atlanta. "Women are four times as likely as men to have rheumatoid arthritis. The medications, physical therapy and ongoing care by specialists can be very hard for people with rheumatoid arthritis who have low incomes or significant debts."

But the greatest challenge facing the high-risk pools is that they may soon run out of money.

"Ohio received only $152 million to cover 5,000 people," said Flood, a rheumatologist who practices in Columbus, Ohio. "This is a very small amount considering the need."

The chief actuary of the Centers of Medicare and Medicaid Services warned in July that the $5 billion in federal funds could be gone as early as 2012. If that happens, states will face difficult choices: eliminate benefits, raise premiums or limit enrollment.

The Congressional Budget Office also warned in July that if enrollment isn’t capped at 200,000, an additional $5 billion to $10 billion will be needed to support high-risk pools until 2014. Montana has capped its enrollment at 400; 60 people applied in July. Other states are considering limiting their enrollments.

Flood said the March passage of health reform–the law is called the Patient Protection and Affordable Care Act–was a historic achievement. But as the high-risk pools start taking effect, they have shown that more still needs to be done.

"The American College of Rheumatology and other groups must continue our advocacy efforts to ensure that the implementation of this legislation will make affordable policies a reality for people with pre-existing conditions," he said.

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Sharon Johnson is a New York-based freelance writer.