SCI Coverage Matrix Glossary: High-Risk Pools

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High-Risk Pools

A high-risk pool is, typically, a state-created, nonprofit association that offers comprehensive health insurance benefits to individuals with pre-existing health problems. This could include people who:

Have been denied coverage in the private market due to a chronic illness (such as cancer or diabetes) or condition;
Have found they can only access restricted coverage;
Have a specified (in statute or regulation) high-cost condition; or
Have been offered a policy that costs more than what is available from the high-risk pool for substantially similar coverage.

Many state high-risk pools now serve as the "fallback" option under the guaranteed portability requirement of the federal Health Insurance Portability and Accountability Act (HIPAA) for those individuals moving from qualified group coverage to individual coverage. High-risk pools are characterized by strict eligibility requirements which vary from state to state.

Various mechanisms are used to cover the costs of high-risk pools as most operate at a loss due to the expense of the population covered. Funding for high-risk pools is subsidized primarily through assessments on insurers, service charges or taxes on hospitals, or through state general fund revenues, although there are many variations on these financing mechanisms. In addition, federal grant funding (through the Trade Adjustment Act of 2002) was provided as seed money for states to set up the administrative infrastructure. Federal grants have been available to offset the losses of high-risk pools if the pool meets certain conditions.

Aside from affordability and financing, enrollment and effectiveness of high-risk pools are among major issues researched and criticized. For example, while some believe enrollment has been historically low, others claim the pools serve most of the targeted population. Due to the lack of funding, the state pools are also criticized for incorporating excessive exclusions (through pre-existing conditions) for the uninsurable population. Pre-existing condition limitations are not permitted for those individuals entering the high-risk pool under the HIPAA portability option.

IN-DEPTH: High-Risk Pool Resources

Achman, L. and D. Chollet. “Insuring the Uninsurable: An Overview of State High-Risk Health Insurance Pools," The Commonwealth Fund, August 2001.

Chollet, D. "Expanding Individual Health Insurance Coverage: Are High Risk Pools the Answer?" Health Affairs, October 2002.

Communicating for Agriculture

State	High-Risk Pool Description
Alabama	The Alabama Health Plan became operational in 1998 and as of June 2006, there were just over 3,000 people enrolled. The program is financed by member premiums and assessments to the insurance industry based on premium volume in the state. The program has a premium cap that is 200 percent of market rate for comparable coverage.
Alaska	In 1993, the legislature of the state of Alaska created the Alaska Comprehensive Health Insurance Association (ACHIA) to provide health insurance to high risk individuals who are unable to find or who are denied health insurance coverage in the private market because of medical condition and to those individuals who have had prior health insurance coverage and meet the federal rules for eligibility. The premium cap for the program is 150 percent of market rate for comparable coverage. The program is financed through subscribers' premiums and assessments on insurers. At the end of June 2006, about 500 persons were enrolled in the program.
Arkansas	The Arkansas Comprehensive Health Insurance Pool was created in 1996 as a state program that was intended to provide an alternative market for health insurance for certain uninsurable Arkansas residents and to provide the acceptable alternative mechanism as described in the Health Insurance Portability and Accountability Act (HIPAA) of 1996 for providing portable and accessible individual health insurance for federally eligible individuals. The premium cap for the pool is set at 150 percent of market rate for comparable coverage. At the end of June 2006, approximately 2,900 people were enrolled in the pool.
California	The California Major Risk Medical Insurance Program (MRMIP) was a program developed to provide health insurance for Californians who are unable to obtain coverage in the individual insurance market. This program became operational in 1991. Subscribers in the MRMIP are charged a monthly premium ranging from 125 to 137.5 percent of each participating plan's average standard individual rate. As of December 2006, just under 8,000 persons were enrolled in MRMIP. After 36 months, MRMIP subscribers are disenrolled and given access to guaranteed issue individual market products (GIP). GIP losses are shared jointly by the insurance industry via assessments and the state via annual appropriations. Premiums for GIP are approximately 10 percent higher than MRMIP products. GIP products have similar benefits to MRMIP but a higher annual benefit maximum ($200,000). As of June 2005, over 6,700 persons were enrolled in a GIP product.
Colorado	Colorado 's high-risk pool, CoverColorado, became operational in 1991. The pool has a premium cap of 150 percent of market rate for similar coverage and is financed by the state's unclaimed property trust fund, premiums paid by recipients, and a premium tax credit. For recipients who earn less than $50,000 per year, premium subsidies may be available. Premium discounts represent an approximately 20 percent reduction from the standard PPO rate. As of June 2006, just over 5,000 persons were enrolled in the program.
Connecticut	The Connecticut Health Reinsurance Association has been in operation since 1976 and is financed through premiums and assessments on insurers. The premium cap is 125 percent of market rate for comparable coverage at initial enrollment and 150 percent at maximum. Connecticut charges a lower premium for recipients who have income less than 200 percent FPL. As the end of 2005, more than 2,400 persons were enrolled in the program.
Florida	Florida's high-risk pool, the Florida Comprehensive Health Association has been closed to new enrollment since 1991. There are approximately 500 individual who remain enrolled in the program which was originally established in 1983. The premium cap varies (between 200 percent and 250 percent) and is determined by risk. The program is financed through premiums and assessments on insurers.
Idaho	The Idaho Individual High-Risk Reinsurance Pool became operational in 2001 and currently has an enrollment of approximately 1,400 individuals. In the nongroup (individual) market, the state operates the Individual High-Risk Reinsurance Pool that reinsures five guaranteed issue products and sets premiums for the guaranteed issue products. The primary insurer is responsible for the first $5,000 in claims, 10 percent of the next $25,000. All claims exceeding $25,000 are covered by the reinsurance pool, up to the lifetime maximums of the guaranteed issue products. The pool is funded through premiums, a portion of the state premium tax, and, if necessary, an assessment on insurers. The premiums for the guaranteed issue products are between 125 percent and 150 percent of the rates applicable to standard risks. The Idaho High-Risk Pool functions differently than most state high-risk pools. Under Idaho 's program, all carriers who offer individual health insurance must also offer the Idaho Individual High-Risk Reinsurance Pool plans, as well as notify persons applying for individual coverage of these high-risk pool plans. Also see the description of the Reinsurance Pool in Reinsurance strategies.
Illinois	Illinois' high risk pool, the Illinois Comprehensive Health Insurance Plan (ICHIP), became operational in 1989. ICHIP operates two programs: The traditional CHIP covers medically uninsurable and is funded by premiums paid by participants and state general funds and in 2004 premiums were set at 143 percent of the average charged for comparable coverage; and HIPAA-CHIP covers HIPAA and HCTC qualified individuals and is funded through member premiums and an assessment on the insurance industry. In 2004, federal grant funds helped offset premium. Premiums are set at 135 percent of the average charges for comparable services. At the end of 2004, 16,409 persons were enrolled in the program.
Indiana	Indiana 's high-risk pool, the Indiana Comprehensive Health Insurance Association became operational in 1982 and is financed by assessments on insurers. The premium cap for the program is 150 percent of average commercial rates for individual rates. As of June 2006, just over 7,200 persons were enrolled in the program.
Iowa	The Health Insurance Plan of Iowa (HIPIOWA) is the high-risk pool that serves residents that cannot purchase coverage in the private market for reasons including: pre-existing medical condition or disease diagnosis that causes a premium hike higher than HIPIOWA rates, reduced benefits or a rider, or an outright denial. Residents of Iowa are also eligible if they qualify under federal HIPAA or COBRA protections. At the end of 2004, just over 100 persons were enrolled. The Iowa Individual Health Benefit Reinsurance Association (IHBRA) has been merged into HIPIOWA effective January, 2005.
Kansas	The Kansas Health Insurance Association (KHIA) offers health benefits for residents who are unable to purchase coverage in the private market for a pre-existing condition, who qualify for HIPAA protections or COBRA rights, who have been quoted a rate higher than the KHIA rate, or who have exhausted health coverage. KHIA premium rates are set to be self-sustaining, but the insurance industry may be assessed to cover pool losses. As of the end June 2006, approximately 1,700 individuals were enrolled in the program.
Kentucky	Kentucky 's high-risk pool, Kentucky Access, became operational in 2001 and is financed by program participant premiums, tobacco settlement funds, and assessments on insurers. The program's premium cap is set at 175 percent of market rate for comparable coverage but the program currently sets rates at 130 percent. As May 2006, approximately 3,700 persons were enrolled in the program.
Louisiana	The Louisiana Health Plan, Louisiana 's high risk pool and HIPAA pools, became operational in 1992 and is financed through several sources, including state general revenues, the Louisiana mandated service charge, insurer assessments, and policyholder premiums. The premiums range from 125 percent to 200 percent of market rate for comparable coverage. By the end of 2005, just under 1,200 people were enrolled in the program.
Maryland	Since 2003, Maryland has offered a health insurance program, The Maryland Health Insurance Plan (MHIP), to residents who are considered uninsurable either because they are high risk or have a history of medical problems that makes it difficult for them to find affordable insurance coverage in the individual market. In December 2005, MHIP introduced a special premium subsidy program for low income enrollees. Called MHIP+, the program offers discounted premiums and deductibles to individuals with incomes under 225 percent FPL. MHIP also serves as the "fallback" option under the federal Health Insurance Portability and Accountability Act's (HIPAA) guaranteed portability requirement for those individuals transitioning from group to individual coverage. Maryland 's risk pool is funded by assessments on Maryland hospitals' net patient revenues, a subsidy mechanism that distributes the cost of the risk pool broadly. As of November 2006, MHIP has more than 9,500 enrollees.
Minnesota	Minnesota Comprehensive Health Association (MCHA) was established in 1976 by the Minnesota legislature to offer policies of individual health insurance to Minnesota residents who have been turned down for health insurance by the private market due to pre-existing health conditions. MCHA is sometimes referred to as Minnesota 's "high-risk pool" for health insurance or health insurance of last resort. By law premiums are set at 101 percent - 125 percent of the weighted average for comparable policies. The program is funded through member premiums and an annual assessment on all health plans. At the end 2005, about 31,000 Minnesota residents are insured by MCHA throughout the state.
Mississippi	The Mississippi Comprehensive Health Insurance Risk Pool Association became operational in 1992. The pool is financed by subscriber premiums and an assessment to insurers. The premium cap is set at 150 percent of comparable coverage in the private market at initial enrollment with a maximum of 175 percent of private coverage. At the end of 2005, just over 4,300 persons were enrolled in the program.
Missouri	The Missouri Health Insurance Pool (MHIP) was established by and operates according to legislation enacted in 1991. Although the MHIP is not an insurance company, it is supervised by the Missouri Department of Insurance. The MHIP is funded by premiums paid by its enrollees and assessments paid by health insurers and HMOs that issue coverage to Missouri residents. There is no limit on the number of individuals who may be enrolled in the MHIP. The MHIP offers individual coverage through four major medical plans which differ only in the amount of the annual deductible and out-of-pocket maximums. Deductibles range from $500 to $5,000; out-of-pocket maximums range from $2,500 to $5,000. The maximum benefit payable on behalf of any individual during his or her lifetime under any plan or combination of plans the MHIP offers is $1,000,000 for all injuries and illnesses combined. At the end of 2005, approximately 2,800 persons were enrolled in the pool.
Montana	In 1987, the Montana Comprehensive Health Insurance Association (MCHA) began operation. The pool operates a traditional high-risk pool for Montana residents who received rejection from health plans for health coverage, have a qualifying medical condition, or received a restrictive rider or pre-existing condition exclusion. The Montana Comprehensive Health Insurance Association also serves as a HIPAA alternative mechanism that guarantees coverage for individuals who lose access to group coverage and provides coverage for specific federally eligible individuals. MCHA operates a premium assistance pilot program designed to assist low-income individuals to purchase coverage. The program reduces the preexisting condition waiting period to four months (if applicable) and subsidizes premiums 45 percent and is paid for with a federal grant. MCHA enrollment as of June 2006 was approximately 3,200.
Nebraska	The Nebraska Comprehensive Health Insurance Pool became operational in 1986. The premium cap for the program is set at 135 percent of average standard health insurance rates. Premium charges for children are set at 50 percent of the standard rate. At the end of May 2006, just over 5,400 persons were enrolled in the pool.
New Hampshire	The New Hampshire High-Risk Insurance Pool became operational in 2002. The pool is financed through participant premiums, as well as assessments of insurance plans based on a "per covered lives" basis. Premium caps for the pool are not less than 125 percent and not higher than 150 percent of the standard risk rate for comparable coverage. At the end of 2005, just over 630 persons were enrolled in the pool.
New Mexico	The New Mexico Medical Insurance Pool (NMMIP) became operational in 1988 and is financed by premiums and assessments to insurers. High-risk individuals previously rejected by commercial carriers, those having received a rate increase or rate quote exceeding certain limits based on health status, those who have specific pre-existing conditions, or who have received notice of a rider, waiver, or restrictive provision are eligible to participate. The premium cap is set at 140 percent of the standard risk rate. New Mexico operates a 75 percent premium subsidy for recipients who earn between 0 percent and 200 percent FPL and a 50 percent premium reduction for recipients between 200 percent FPL and 399 percent FPL. The subsidy program is called the Low Income Premium Program (LIPP). NMMIP will be offering a "group" product designed for high-risk members of the Small Employer Insurance Program (see below) administered by the same carrier. At the end of June 2006, over 2,300 persons were enrolled in the New Mexico Medical Insurance Pool. NMMIP will be offering a "group" product designed for high-risk members of the Small Employer Insurance Program (see below) administered by the same carrier. This product is another Insure New Mexico! solution for employers and has a similar benefit package to SCI but with different premiums and cost sharing.
North Dakota	The Comprehensive Health Association of North Dakota became operational in 1982. The pool is financed by assessments on accident and health insurers that write more than $100,000 in premium volume within the state. The premium cap is set at 135 percent of the individual premium rate charged for similar coverage throughout the state. At the end of 2005, just over 1,730 persons receive coverage from the pool.
Oklahoma	The Oklahoma Health Insurance High Risk Pool became operational in 1996. The pool is financed by premiums and assessments to the insurers. The premium cap is set at 150 percent of the average premium rate charged. As of October 2005, 2,729 persons were enrolled in the pool.
Oregon	The Oregon Medical Insurance Pool became operational in 1990 and is financed by premiums and assessments on insurers and reinsurers. The premium cap is set at 125 percent of average rates for individual coverage but portability premiums cannot be more than 100 percent of average portability rate charged by insurers. As of June 2006, approximately 15,000 were enrolled in the pool.
South Carolina	The South Carolina Health Insurance Pool became operational in 1990 and is financed by premiums and assessments on insurers. The premium cap is set at 200 percent for comparable coverage on the market. At the end of the 2005, just over 2,200 persons were enrolled in the program.
South Dakota	The South Dakota Risk Pool was created in 2003 to provide coverage to people who have lost coverage and have previous creditable coverage. However, unlike most high-risk pools, the program does not serve uninsured individuals who have a pre-existing condition or illness that causes them to be declined by private insurers unless the person recently lost creditable coverage. The program is financed by a combination of premiums paid by individual members, state general revenue, assessments on health insurance carriers, and an initial start-up grant from CMS' risk pool grant program. The premium cap is set at 150 percent of the average in force premium or payment rate for that classification charged by the three carriers with the largest number of individual health plan benefit plans in the state during the preceding calendar year. As of May 2006, 675 persons were enrolled in the pool.
Tennessee	The new Cover Tennessee legislation creates a high-risk pool called AccessTN. Prior to TennCare, the state operated a high-risk pool but it was disbanded when the state chose to cover uninsurable individuals under its TennCare waiver. The new pool will be funded by a combination of premiums, assessments on carriers and third party administrators, state appropriations, and possible federal funds pending grant release from CMS. Premiums charged to pool enrollees will be between 150 percent and 200 percent of a commercial benchmark plan after moderate medical underwriting. The state also authorized a premium assistance program to subsidize individuals who cannot afford the premiums.
Texas	The Texas Health Insurance Risk Pool became operational in 1998. The pool is financed by premiums paid by enrollees and assessments on insurers. The premium cap is 200 percent of the average standard rate for commercial health insurance. The board of directors sets the rates annually; currently they are at the maximum of 200 percent. At the end of July 2006, over 28,000 people were enrolled in the pool.
Utah	The Utah Comprehensive Health Insurance Pool (HIPUtah) became operational in 1991. The pool is financed by the State Comprehensive Health Insurance Pool Enterprise Fund and legislature appropriations. The premium rate is set at 200 percent of the standard risk rate. As of June 2006, just over 3,300 people were enrolled.
Washington	The Washington State Health Insurance Pool first became operational in 1988. The pool is financed through premiums and assessments to insurers. The premium cap is 150 percent of the standard risk rate in general but 125 percent for the Pool's preferred provider plan. At the end of 2006, approximately 3100 persons were enrolled in the program.
West Virginia	The West Virginia high-risk pool, known as AccessWV, became operational in 2005. The program is financed through premiums and an assessment on hospitals. The premium cap is not less than 125 percent of the standard individual risk rates for comparable coverage, but shall not exceed 150 percent. At the end of June 2006, over 200 individuals were receiving coverage through the pool.
Wisconsin	Wisconsin 's high-risk pool, the Wisconsin Health Insurance Risk Sharing Plan (HIRSP) became operational in 1981 and provides a choice of three benefit coverage options. The pool is financed through policyholder premiums, assessments on insurers, and provider discounts. Premium subsidies are available for qualified low income policyholders. The premium cap is set at 200 percent of the rate that a standard risk would be charged under a policy providing the same coverage deductible. At the end of 2005, just under 19,000 persons were enrolled in the program.
Wyoming	The Wyoming Health Insurance Pool became operational in 1991. According to state regulations, premiums for the pool are not to exceed 200 percent of the standard market rate. The pool is funded by assessments on all insurers writing health insurance business in the state plus any self-insured plans not governed by ERISA. In May 2006, almost 650 persons were enrolled in the pool.