State of the Industry 2011: High-Risk Pools

Many fear that the $5 billion allocated by the federal government for high-risk insurance pools won't last until 2014.

That money is supposed to provide temporary relief to chronically ill consumers until they can obtain insurance through exchanges-and when the provision for the elimination of pre-existing conditions in underwriting goes into effect. However, most pools, whether operated by the federal government or by individual states, require high premiums and likely will cap enrollment to stay afloat.

The money will only run out if regulators running each state's plan do not budget accordingly, says Travis R. Ford, a spokesman for the Missouri Department of Insurance.

"We've budgeted for this money to last until 2014," he says. "Our actuary said we could handle 2,600 consumers-that's far below the need. But that's the number that the funding would allow us to insure. We will have to limit enrollment based on the funds that we have."

So far, that hasn't been a problem. In the program's first five weeks, the state had received only 70 applications, according to Ford.

"We were expecting to insure 1,000 people by the end of this year," he says.

To qualify for funding, consumers must be a U.S. citizen with a pre-existing medical condition and without insurance for six months, which is a point of contention. The six-month requirement generally means consumers in existing state pools wouldn't be able to transition into the new programs. An even greater problem is that the premiums are still unaffordable for many who qualify.

Missouri is working with caregivers and advocacy groups, including hospitals, health clinics and social workers, to spread word about the new program.

"We think there's going to be a great demand for this kind of insurance," Ford says. "We're going to do what we can afford to do."