Focus on Health Care Reform: High Risk Health Insurance Pool


The ban on pre-existing condition exclusions that is part of federal health reform does not take effect until 2014. To ensure individuals who may be subject to those provisions can still find reasonably-priced coverage, Congress appropriated $5 billion to support development of high-risk health insurance pools in the states. North Carolina is one of 35 states that had already established a high-risk pool. State support for that program must continue to ensure eligibility for federal assistance.

There are differences between the NC program and the federal minimum standards. For example, federal law has no pre-existing condition waiting period (NC has a 12 month pre-existing condition exclusion), the federal pool premium would be capped at 100 percent of the standard risk rate (NC is capped at 150 percent of the standard risk rate). There are also important differences in the pre-enrollment coverage limitations. Federal law requires that an individual be uninsured for 6 months prior to enrollment, while NC in many cases permits enrollment immediately. Inclusive Health indicates that eighty percent (80%) of those in the state high-risk pool had health coverage at the time they entered the pool. This difference in the handling of pre-enrollment coverage means that the state program will probably run alongside the federal high risk pool in NC.

If the risk pools were merged, all of those currently in the NC program would be uninsured for 6 months before they would be eligible for enrollment in the federal pool. We further anticipate that both programs will be administered by the same team that now runs Inclusive Health. Once the federal insurance reforms take effect, both the federal and state high-risk pools will probably cease operation.

The NCMS will continue to monitor implementation and operational issues related to the high-risk pool.

Editor’s Note: At the direction of the NCMS Board of Directors, your NCMS staff will be examining and reporting on specific provisions contained in the new health care reform law. These special reports will be published weekly in our Bulletin series, Focus on Health Care Reform.


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