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Health insurance risk pool - A brief idea

Health insurance risk pool - A brief idea

A health insurance pool is a program operated by the state. It offers health insurance to people who are unable to secure it through group insurance or through employer sponsored programs. In addition, these are programs offered to people who have serious medical conditions which are normally not covered by insurance plans. This makes it impossible for them to purchase private insurance. Most of the pools are financed by the premiums paid by members of the plan. These are aided by tax revenues and assessments on insurance companies functioning in the state.

Over 30 states currently provide these pools in the country. They cover around 180000 people in the country. In certain cases, the states do not have enough funds to cater to all people needing the pool in the state.

In most cases, the coverage provided under these pools is similar to those provided by private insurers. They also impose waiting periods on applicants because of pre existing conditions. However, in some cases, the pools may provide limited benefits only. In certain cases, the pool may provide mental health care or maternity covers but at high deductibles.

Cost of purchasing policies through high risk pools: Policies bought through risk pools are always more expensive compared to those sold by private companies. This is because in most cases, the rates are based on a certain percentage of the standard rate charged by insurance companies. Additionally, the premiums are usually fixed according to the age of the applicant. Therefore, coverage becomes expensive for people who are aged 50 or 60.

Eligibility for high risk pools: There are certain categories which you can avail of to participate in these pools. These include the following-

  • The person receives a note rejecting his application for insurance from a private insurer.
  • The person receives a policy which reduces his benefits significantly because of a particular condition.
  • The person is offered covers at premium rates which are considerably higher than the prevalent rates.
  • The person has a condition included in the list of conditions included under the pool (cancer, AIDS etc).
  • The person is eligible for Trade Adjustment Assistance if he lost employment because of increased imports. In some states, this is used for HRP.
  • If the person suffered a termination of policy which was not voluntary.
  • The person has eligibility under HIPAA. The conditions of eligibility under HIPAA are as follows- (a) The person has had at least 18 months of continued coverage. The last plan should have been a group plan. (b) The person should have ended his coverage under COBRA. (c) The person should not be eligible for Medicaid or Medicare. (d) The person should have applied for the cover within 63 days of end of the last cover. If your state allows a risk pool to apply for a HSA account, you will not have a pre existing waiting period.

Of course, there are caps on the enrollment of candidates in these health pools. These are basically dependant on the funds of the pool. Some states have a wait list for enrollments. But if the person has federal eligibility and the state has provisions for federally eligible candidates, the pool has to enroll you when the application is received. It must do so even if the enrollments are closed at the time.

To find out whether your state provides high risk pools and eligibility criteria, contact your state insurance commissioner.

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