New health care plans for uninsured off to slow start

Kaiser Health NewsAugust 20, 2010 

WASHINGTON — Ruth Titus, a 59-year-old cook from Taos, N.M., leaped at the opportunity in July to sign up for health insurance under a new federally subsidized program for uninsured people with health problems. With her history of bladder cancer, she said, "it was hopeless to even look" for private coverage because she'd be turned down.

Titus is one of what some officials say has been an unexpectedly small number of people to sign up for the program, which the Obama administration touted as an early benefit of the new health overhaul law. It began last month in 30 states with the expectation that many thousands of uninsured people would apply for the opportunity to get comprehensive coverage regardless of their health status, but that hasn't been the case.

About 3,600 people have applied and about 1,200 have been approved so far in state plans that started in the beginning of July, according to data from the states and federal government. Officials say that the new plans, although they're a better deal than anything comparable on the private market, still may be unaffordable for many people. Eligibility requirements are another possible barrier, and states have had little time to publicize the plans.

It's too soon to gauge the program's impact — the plans won't be up and running in all the states until September — but some officials are surprised.

"It's early, but thus far interest in the program is lower than we expected," said Michael Keough, the executive director of the North Carolina Health Insurance Risk Pool, which started July 1. As of Tuesday, 314 people had applied and 158 had been approved.

GettingUSCovered, Colorado's program, has received 204 applications; 108 people are enrolled. It's a "very low number given that there are hundreds of thousands of uninsured in the state," said Suzanne Bragg-Gamble, the executive director.

Many states were so worried about not being able to meet the demand for coverage with limited federal funding that 22 of them deferred to the U.S. Department of Health and Human Services to run the new plans. The other 28 states and the District of Columbia opted to start their own.

Enrollees must pay premiums for their coverage, which is comprehensive and doesn't exclude any pre-existing conditions. The federal government is subsidizing the program with $5 billion until 2014, when the program will end because insurers no longer will be able to discriminate based on health status.

The Congressional Budget Office has estimated that as many as 4 million uninsured Americans will be eligible and that 200,000 will be enrolled by 2013. That projection assumes that some people won't be interested or won't be able to afford the premiums.

The new plans are seen as a big improvement over existing "high-risk" programs in many states that provide an option — often at a very high cost and after long waiting periods — to people who have difficulty getting insurance.

Not everyone can afford the new plans' premiums, however, although they're cheaper than those of the existing high-risk programs. Federal regulations prohibit the new plans from charging more when people have health problems, though.

Premiums vary from plan to plan and are affected by applicants' ages, where they live and whether they smoke. For example, the monthly premium for a person age 45 to 54 who doesn't smoke ranges from $330 in Hawaii to $556 in Florida, according to HHS. A 50-year-old nonsmoker in Denver would pay $397 a month with a $2,500 deductible; a 40-year-old would pay $275 a month.

Titus pays $251 monthly for her policy, which includes a $2,000 deductible.

"It was a huge relief," she said after she obtained coverage. "Even though it's expensive, it is nothing like trying to pay out of pocket for every day in the hospital."

Applicants may be put off by eligibility criteria. They must have been uninsured for at least six months and have pre-existing conditions. They also must prove that a private insurer has rejected them for coverage within the past six months or denied coverage for certain benefits. At least a dozen states give applicants the option of providing doctors' notes as proof that they have pre-existing conditions such as cancer or rheumatoid arthritis.

Officials with the state plans also point to a lack of publicity. Government Employees Health Association, the Kansas City, Mo., company that has the federal contract to run the plans in 22 states, said it hadn't yet started a major marketing campaign.

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