The cost of caring for people with chronic, serious health conditions is immense, and how to pay for it has plagued both political parties for years. Republicans are now touting high-risk pools as a way to do it, but past attempts have not been successful, according to a report from the Pew Charitable Trusts.
In 2011, an estimated 226,615 people were in high-risk pools nationwide, but these plans largely disappeared with the advent of the Patient Protection and Affordable Care Act (PPACA), which prohibits commercial insurers from turning away customers with serious health conditions. Now, as President Donald Trump and Republicans in Congress prepare to dismantle the PPACA, they are touting high-risk pools as a partial replacement.
In 2011, the last year for which statistics are available, the top 1% of health care spenders accounted for 23% of overall spending, and the top 20% were responsible for 82% of the total. Before the PPACA was passed, many of those high-cost patients found their way to high-risk pools.
“They were the sickest of the sick,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation, who has written about high-risk pools.
In a 2015 report, the Commonwealth Fund noted that by concentrating risk—putting the sickest, most-expensive patients in one place—the pools also concentrated costs, making high premiums and coverage limits practically inevitable.
The fundamental idea behind the PPACA was to put everybody—old, young, sick, and healthy—in the same pool so that healthier, less-expensive patients would subsidize the cost of care for the sicker, more-expensive ones through their premiums. To achieve this, the PPACA requires that everyone purchase health insurance whether they want it or not––the so-called individual mandate.
Most of the Republican proposals to dismantle the PPACA envision federal support for states’ new high-risk pools, perhaps in the form of federal block grants or a state–federal partnership similar to Medicaid. Instead of subsidizing the most-expensive patients through their insurance premiums, Americans would bear those costs through their taxes.
Michael Tanner of the Cato Institute, a libertarian think tank, said keeping the most- unhealthy Americans in the overall insurance market will drive up premiums for everyone, especially if the individual mandate is eliminated and many healthy Americans forgo buying insurance. Rather than force young, healthy people to pay higher premiums to subsidize the care of the not-so-healthy, Tanner wants the federal government to subsidize people in the high-risk pools, although that would likely mean higher taxes.
But some health-policy experts worry that whatever funding mechanism President Trump and congressional Republicans come up with will be insufficient, leading to the problems that high-risk pools had in the past.
Source: Pew Charitable Trusts; February 16, 2017.