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Back to the future: Insurance pools for high-risk patients could be revived

Pauline Bartolone | Kaiser Health News | 12/1/2016, midnight

It wasn’t so long ago that health insurance horror stories fueled discussions around the family dinner table and the national debate over health care reform.

“One company said I was too heavy,” said Scott Svonkin, of Los Angeles, of the time he was denied an individual health policy in 2005. Svonkin, 50, said two other insurers seemed OK with his weight but also turned him down, citing his asthma and his wife’s pregnancy, which could put the insurers on the hook for a dependent whose health was uncertain.

“I was horrified that insurance companies would turn me down,” said Svonkin, who now works for the L.A. county assessor and is chairman of the County Commission on Insurance.

Svonkin, pictured here with his newborn son, Sam, in 2006. Svonkin says he was denied health insurance three times before changes came online under the Affordable Care Act. He found health coverage in a high-risk pool.

Svonkin, pictured here with his newborn son, Sam, in 2006. Svonkin says he was denied health insurance three times before changes under the Affordable Care Act. He found health coverage in a high-risk pool. (Courtesy of Scott Svonkin)

Svonkin did get coverage, however, thanks to a state-run “high risk” health insurance program, created for people who couldn’t get insurance because of preexisting conditions such as a past illness or a chronic disease. Thirty-four other states created similar programs, which have since dwindled or dissolved because the Affordable Care Act required health insurers not to exclude people based on their health status. The pools used state money, such as tax revenue or private insurer fees, to pay for their care.

Now President-elect Donald Trump and Republican Congressional leaders say they want to revive high-risk insurance pools for the sick or uninsurable.

But some California health officials and policy experts say that would be a big step backward—to a state program that offered long waits for coverage, high prices, limited benefits and few health plan choices.

“People would literally pass away while they were on the waiting list,” said Richard Figueroa, who was one of the original staff members of California’s program, the Major Risk Medical Insurance Program (MRMIP), when it started in the early 1990s. Later, he served on the governing agency’s board before it was dissolved under the Affordable Care Act.

The program never had enough money to cover the need among the uninsured, Figueroa said. It had a $30 to $40 million budget in a given year, mostly from tobacco tax revenue. Figueroa said the limit on how many people could enroll declined over the years in part because costs kept rising. In 2011, fewer than 7,000 people were enrolled.

In the 1990s, thousands of people languished on waiting lists, Figueroa said. When their turn came for coverage, some people found they couldn’t afford the monthly premium.

“We never advertised. Because why would you advertise something that wasn’t available?” said Figueroa, now the director of health and human services for the California Endowment.

“We were a stopgap; we were a holding place, a waiting area,” said Figueroa. “We were always hoping [the program] would go away with the advent of national insurance reform,” he said.