The last two insurers still offering to cover Utahns under Obamacare say the system is broken — and to help fix it, they want state lawmakers to exclude patients with the highest medical costs.
SelectHealth — Intermountain Healthcare’s insurance arm — and University of Utah Health Plans want the state to reopen a high-risk insurance pool, a sore subject for many Utahns with pre-existing medical conditions.
Patients with predictably higher medical costs would buy their coverage through the pool — an option that can mean higher premiums or other consumer costs and is typically subsidized by taxpayers.
Healthier Utahns would buy their policies from the two companies through Obamacare’s online marketplace — with the premiums and the costs of care expected to be lower, after sicker patients are removed.
The two companies pitched their reform “wish lists” to state lawmakers last week, after a third insurer, Molina Healthcare, suddenly dropped out of the Utah marketplace in early August. Molina was facing massive quarterly losses amid rising concerns about Obamacare’s overall stability.
The struggles plaguing providers under the Affordable Care Act (ACA) are too great to ignore, said Rep. Robert Spendlove, R-Sandy, the likely sponsor of a bill to revive Utah’s high-risk pool. Supporters believe it will help lower premiums for healthy Utahns who don’t receive coverage through their employer or another government program and give the insurance providers financial relief they say they need to stay afloat in the individual market.
“By creating a high-risk pool, we will be able to better address the unique health struggle of people [with pre-existing conditions and high care costs], while also doing a better job of controlling costs overall,” Spendlove said.
The high-risk pool Utah operated before the ACA became law widened access to coverage, its former director said, but it was expensive and eligibility was extremely limited.
Given that history, said Jason Stevenson of the nonprofit Utah Health Policy Project, the main concern with a new high-risk pool is that it would not provide effective access and care. “If you want to create a sustainable system that works for everyone,” he said, “you can’t carve out risk.”
Utah’s former pool ‘couldn’t cover those ... who needed it most’
State officials have an open invitation from the Trump administration to experiment with high-risk pools and reinsurance programs, which can use federal and state tax dollars to help pay for insurance claims.
At a CNN town hall meeting in January, House Speaker Paul Ryan praised high-risk pools as a “smart way of guaranteeing coverage.” Ryan cited his home state of Wisconsin and Utah as prime examples of how they can work well.
“By financing state high-risk pools to guarantee people get affordable coverage when they have a pre-existing conditions, what you’re doing is, you’re dramatically lowering the price of insurance for everybody else,” Ryan said.
Tomi Ossana, the director of Utah’s prior high-risk pool, said it lowered premiums for some consumers but was flawed. The state established Utah’s Comprehensive Health Insurance Pool (HIPUtah) in 1991 and coverage was offered through SelectHealth.
Eligibility was extremely limited, wait lists stretched six to 10 months for those with pre-existing conditions, and there were annual and lifetime caps on coverage. Premiums were comparable to what they are now on some ACA plans, she said, but with high deductibles and out-of-pocket costs.
The program was also costly, Ossana said, and regularly ran out of funds.
“It’s all about how you structure high-risk pools,” Ossana said. “We had a really good pool, but it wasn’t affordable and we couldn’t cover those individuals who needed it most.”
Utah was one of 35 states that used high-risks pools before the ACA stopped insurers from refusing to cover those with pre-existing conditions or charging them more. In 2010, the federal government created its own high-risk pool.
That federal program, too, hemorrhaged money, Ossana said.
New innovation waivers encourage states to find fixes
With Obamacare left in place after the failure of the Senate’s repeal efforts, the Department of Health and Human Services and the Department of Treasury have been promoting state innovation waivers to stabilize insurance markets.
In July, the departments approved Alaska’s application for a waiver to support its reinsurance program. Patients with high-cost medical conditions stay in the Obamacare marketplace, but federal funding helps cover their claims. The state has estimated marketplace premiums will be 20 percent lower in 2018 than they would be without the waiver and that more consumers may get coverage.
According to Alaska Gov. Bill Walker’s office, the waiver will provide approximately $322 million in funding to the program over the next five years. Similar efforts are underway in Minnesota, Oklahoma and Maine.
The state innovation waiver system may provide funding for a reboot of Utah’s high-risk pool, Spendlove said.
Spendlove confirmed he is working with insurance providers and health care advocates on several possible versions, depending on Congress’ direction on the ACA. Funding could also come through a Medicaid waiver, he said. Either way, creating a pool would require federal approval.
