States Debate on Running Health Insurance Pools

Posted in Health Insurance

May 4th, 2010

The health care debate that spent so much time at the national level has now filtered down to states as they try to figure out whether they need health insurance pools. While some governors have claimed federal funds to start their own health insurance pools as soon as possible, other governors have decided to decline the option altogether. The deadline to claim the funds was Friday.

What the Pools Are About

As a result of the health care reform law, states were given the opportunity to create health insurance pools that would allow those with pre-existing conditions who are not currently insured to join what is called a “high-risk insurance pool.” In this pool, these individuals would be allowed to purchase insurance with they’d previously been rejected by private health insurance companies.

While some governors jumped on the federal funds to get their pool started in their states, others decided the pool wasn’t for them.

States Opting In/Out of Insurance Pool

A number of states have decided to take part in the health insurance pool option. Some include:

• Montana
• Pennsylvania
• Washington
• Wisconsin

These states, run by Democratic officials, along with Republican-run California, will operate these programs under contract with the federal government. Aside from Arnold Schwarzenegger’s support, most Republican-run states have opted out of the program, including:

• Georgia
• Indiana
• Nebraska
• Nevada

One Democrat-run state, Wyoming, has also opted out.

Why States Are Opting Out

Wyoming’s governor, Dave Freudenthal, has said he’s chosen to opt out of the program because he feels that the state’s federal allotment of $8 million “may prove insufficient” to subsidize coverage for the next three and a half years, seeing that the funds would have to last until Jan. 1, 2014 when health insurance companies would be have to accept all applicants.

Other state leaders feel that having some funds is better than none at all and therefore, this step is a great first one toward getting the masses insured.

How do you feel about adding a high-risk health insurance pool for your state?