HR4519FEB3

TheWeekInCongress.com

Week Ending February 3, 2006

H.R.4519 To amend the Public Health Service Act to extend funding for the operation of State high risk health insurance pools.

The bill aims to improve access to health insurance for individuals who, due to pre-existing conditions or high health care costs, can not get or afford health insurance. Such individuals, the bill sponsor explained, often turn to Medicaid or other government programs.

The answer for those individuals is coverage through a State high-risk insurance pool. Simplistically, pooling those individuals together would allow for some leverage when purchasing insurance from private insurance companies. The bill would allow States to begin such a program or expand existing ones.

The bill would meet its goals through the process of awarding grants to States that qualify and by directing certain percentages of the grants to be used in a specific fashion. The bill appropriates $15 million and would award $1 million to States to start high risk pools. To reduce premiums for enrollees charged at or over 150% of the typical premium, the bill requires States to provide up to fifty percent of allotted funds to reduce premium costs.

The bill is equal to HR 3204 which was passed by the House in December 2005. While considering that version of this bill, supporter Rep. Sherrod Brown (D-OH-13th) Offered some insight to the bill and the program it supports. “In many States, high-risk insurance pools are the only option for individuals who have been denied access to coverage in the commercial insurance system. The legislation before us is intended not only to strengthen existing high-risk pools, but to help States without such pools, my home State of Ohio is one of them, to help States without such pools to establish them.

“But as we reauthorize this legislation, it is important to place high-risk insurance pools in context. These pools are a symptom of a troubled insurance system, not a cure for it.

The fact is, health insurance itself is supposed to serve as a high-risk pool. It used to be that health insurance was offered to everyone at the same premium, because any one of us could be the unlucky one to need the health care we cannot afford.

“By spreading risk broadly, good health insurance can be affordable for everyone regardless of their health needs, regardless of their health status. But commercial insurers did what businesses do, they figured out how to maximize profits. You can hardly blame them for that.

“You can, however, blame policymakers in this body and other places. You can blame policymakers for letting the insurance industry get away with that. The best way to earn profits in the health insurance industry, of course, is to avoid insuring people who may actually use the coverage.

“And health insurers use every trick in the book to do that, to avoid those people. To the extent they can get away with it, commercial insurers underwrite and price people who need coverage right out of the insurance market. Private health insurance used to be a community; now it is almost a country club. So we are left with stopgap mechanisms like high-risk insurance pools.

“They are far from ideal, but our most vulnerable citizens certainly would be worse off without them. We should make sure high-risk insurance pools are available. We should also keep working until we render them unnecessary.

“I appreciate the author's willingness, the gentleman from Arizona (Mr. Shadegg), and the gentleman from Texas (Chairman Barton) to accept an amendment I offered during committee consideration to ensure that States use at least 50 percent of the bill's funding to expand access to the pool or to improve the high-risk coverage.

“As it stands, States can and have used Federal risk-pool funding to replace dollars collected for the pool from private insurers, leaving the risk pools themselves no better off. That is a subversion of the bill's purposes and a questionable use of Federal funding. My amendment that the committee accepted reminds the States that Federal high-risk pool funding is intended to expand the quality and reach of high-risk pools, not to let commercial insurers off the hook for making those pools unnecessary.”

Sponsor: Rep. John B Shadegg (R-AZ-3^rd)

Vote: Passed House by voice vote February 1, 2005.

Cost to the taxpayers: The bill authorizes $15 million for seed grants for FY 2005 and $50 million yearly through 2009 to operate the high-risk pools. In States where the high-risk premium is more than 150% of the standard-risk premium at least 50% of a grant must go towards reducing the premium for enrollees.

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