Temporary, high-risk health insurance option coming soon to California

On July 1, the federal government and dozens of states set up temporary “high-risk” health insurance pools for people denied health insurance due to so-called pre-existing conditions. These pools were one of the major provisions included in federal health care reform signed into law early this year. 

However, this is only a temporary fix intended to provide health insurance to individuals without coverage until the law goes fully into effect in 2014, when insurance companies will no longer be able to deny people coverage due to a pre-existing condition. Those eligible include citizens and legal residents who have been without coverage for six months and have been denied coverage due to a pre-existing condition. 

While 29 states, including California, will be operating their own pools, 21 states have asked the federal government, specifically the U.S. Department of Health and Human Services, to administer the high-risk pools on their behalf.  Those states include Alabama, Arizona, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia, and Wyoming. Residents in the 21 states whose programs will be made available through the federal government are taking applications July 1-15 and will begin to receive benefits by August 1.

California and other large states like New York and Illinois have run into complications and may not quite make this deadline, though.  Enrollment is not likely to begin until August.

In fact, the California legislature just passed two companion bills on June 28, both expected to be signed by the governor, that, while late-in-the game, moves California a step closer to setting up the high risk pools.  AB 1887 by Assemblyman Villines (R-Fresno) set up the high-risk pool, and SB 227 by Senator Alquist (D-Santa Clara) authorized the state to set up the pool, as well as contract with private insurers to provide health coverage. The bills will allow California to be eligible for more than $750 million in federal funding to finance and run the program. 

California currently has a “high-risk” health insurance coverage pool which covers 7,100 people. With the enactment of this new provision, coverage could increase to 25,000 to 30,000 Californians. Moreover, the new pool is expected to provide cost savings for many uninsured Californians.  It has been reported that Price Waterhouse has estimated that a 50-year old San Francisco resident could see monthly premiums drop from $914 to $575 with the new option. 

Accompanying the soon-to-be-available health insurance coverage was the launch of HealthCare.gov, a one-stop shop for individuals to discover insurance options in their states, as well as a hub for information on the health care reform rollout.