Anticipated Premiums for High Risk Government Health Plan

The Department of HHS today released their indications of cost for the high risk uninsured health insurance program offered by the Federal government.  The Insurance Journal, a leading insurance publication published the following article today:

Premiums for New High Risk Pool to Average $400-$600 Per Month

By Ricardo Alonso-Zaldivar
July 2, 2010

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President Barack Obama’s new health coverage for uninsured people with health problems won’t be cheap — monthly premiums as high as $900, administration officials said.

Prices will vary by state and type of coverage from a low of $140 a month to as much as $900, said Richard Popper, deputy director of a new insurance office at the federal Health and Human Services department. Officials provided details of the plan, which starts enrolling people Thursday.

The price range is so wide because premiums will be keyed to standard individual health insurance rates in each state, which can differ dramatically because of medical costs and the scope of coverage. Independent experts estimate premiums will average around $400 to $600 a month. Younger people will pay less.

“There are going to be meaningful premiums that are going to be required to stay in this plan … in the hundreds of dollars,” said Popper, with the Office of Consumer Information and Insurance Oversight.

Despite the cost, consumer advocates are urging uninsured people with health problems to sign up soon, because they cannot be turned away for medical reasons. Family members may be able to help with premiums.

The Pre-Existing Condition Insurance Plan will start taking applications Thursday in many states, the rest by the end of the month. Coverage will be available as early as August 1.

Consumers can go to a new government website,, to find out about the program and other coverage options in their state. Twenty-nine states and Washington, D.C., will administer their own plans. The federal government will run the program in the remaining 21 states.

The new plan is a stopgap for vulnerable people locked out of the private insurance market because of medical problems. It’s intended to remain available until 2014, when core health care overhaul provisions take effect. At that time, insurers will be barred from turning away people in poor health, low- and middle-income households will get subsidized coverage, and most Americans will for the first time be required to carry health insurance.

To qualify for the pre-existing condition plan, people must be uninsured for at least six months and have been turned down for coverage by a private insurer because of a medical problem. U.S. citizens and legal residents are eligible.

The biggest question hanging over the program is whether the $5 billion allocated will be enough.

Millions of people meet the basic qualifications for coverage, and technical experts who advise Congress and the administration have warned the funds could be exhausted as early as the end of 2011.

HHS officials sidestepped questions about what would happen if the money runs out. One option is for the government to limit enrollment.

Popper estimated about 200,000 people would be enrolled in the program at any one time, but other HHS experts estimated that 375,000 would sign up this year, and the Congressional Budget Office says the total could reach 700,000 in 2013.

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