Rates for New High-Risk Pool May Be Pricey

Published: Fri 02 Jul 2010

Perry Begay

President Obama's new medical coverage for Americans with preexisting health conditions and no health insurance will not be cheap-premiums will average between $300 and $600 monthly in the most populous states, according to a Website the government started on Thursday.

From the cheapest to the most expensive, rates will range from $140 monthly to as high as $900, said Richard Popper, the new insurance office's deputy director at the Department of Health and Human Services, on Wednesday.

The range is so drastic because rates will be tied to standard individual medical insurance premiums in each state, which can vary substantially because of health care costs and the extent of coverage. Moreover, elderly people will pay more for coverage.

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

HealthCare.gov's estimates predict health insurance premiums for a 50-year-old Floridian will range from $552-$675 per month; $400-$600 for a New Yorker of the same age; $491-$600 for a Texan; and $283 for a Pennsylvanian in the same age group. In most states, Americans can begin enrolling in the high risk pool immediately.

In spite of the expense, consumer advocates are encouraging people with health issues and no insurance to sign up ASAP, because they cannot be denied coverage for medical reasons. Relatives might be able to help pay premiums, which are on par with rates paid by people who purchase individual coverage directly from health insurers.

The Pre-Existing Condition Insurance Plan will begin accepting applications in all 50 states by the end of July. Coverage will begin as soon as August 1.

Americans can visit the Website to learn more about coverage, as well as other insurance options provided in their state, including programs like Medicaid and private health insurance. Beginning this fall, the Website will offer simple price and coverage comparison tools among private medical plans. The new health care reform law called for the site's creation as a means of offering Americans one-stop health insurance shopping.

Washington, D.C. and twenty-nine states will manage their own health insurance plans for residents with preexisting medical conditions. In the other 21 states, the federal government will run the high risk program.

The program is a stopgap for medically vulnerable Americans barred from the private health insurance market because of health problems. The high risk option should remain available until 2014, when central health care reform provisions will go into effect. When that happens, health insurers will be prohibited from denying coverage to applicants in poor health, most Americans will be required to have medical insurance, and poorer households will receive subsidized health insurance coverage.