More and more Americans are finding the rising costs of health insurance coverage out of their budget. Group plans, like the ones offered through work, are one way to distribute the financial burden of health care. But what if you aren't part of a group plan and you have a chronic illness? You've probably been denied a policy or offered one with unreachable deductibles. Depending on the state you live in, there could be a group pool specifically for you. High-risk health insurance pools are state-mandated programs designed to provide health insurance coverage to those who are unable to purchase private health insurance due to a pre-existing condition. In this article, we'll take a look at high-risk health insurance pools to get an idea of how they work.
High-risk health insurance pools, which began in Minnesota in 1976, are now offered in more than 30 states, with more than 180,000 people enrolled nationwide [source: Kaiser]. These pools are typically used as a last resort, or to fill in the gap should you find yourself between group policies. But thousands couldn't live without the coverage these pools provide. By gathering "uninsurable" people into a single group, the state can offer them health care -- at a higher cost.
Who are the uninsurables?
High-risk insurance pools are designed for people who can afford to buy insurance, but were denied coverage because of a pre-existing condition. Insurance companies can deny coverage because of a fatal disease, a manageable chronic disease, or even the frequency of routine check-ups. Many people in high-risk insurance pools have received organ transplants or suffer from leukemia, Type 1 diabetes, or cirrhosis. Simply having such an illness isn't enough to qualify for a high-risk pool, though, each state has rigorous eligibility guidelines. Normally, you have to provide proof of state residency, proof of rejection by an insurance carrier, or proof of a denied claim for treatment of pre-existing conditions.
Those not eligible for these high-risk pools include inmates, and people who are also eligible for Medicare or Medicaid, or anyone on COBRA. High-risk pools aren't necessarily a guarantee of coverage though; even the high-risk pools have certain conditions that they can't insure. These too, vary by state. States usually limit the number of people in the group, in which case waiting lists are provided.
In the next section, we'll discuss who's covered and how much it's going to cost them.