Article by Erik Smith. Published on Thursday, May 28, 2010 EST.

No More Waiting on Pre-Existing Conditions – But Premiums Will be Expensive

Insurance Commissioner Mike Kreidler and deputy Mary Clogston at Wednesday’s meeting.

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, May 27.—It’s three-and-a-half years before health care reform takes effect nationwide, but here’s one thing that will happen right away.

            Washington state will launch a new “high-risk” program for people with pre-existing conditions – and unlike the state’s current high-risk program, no waiting period will be required.

            It may be good news for those who don’t have insurance and need treatment for chronic conditions and diseases like AIDS and cancer. But even though federal money will help pay for the insurance, the premiums won’t be cheap – and they probably won’t be any less expensive than the state’s current program. Details are still being worked out, and officials of the state insurance commissioner’s office say the program will begin sometime later this year.

            Will Operate Alongside Existing Program

            The program is designed as a stopgap measure until federal health reform takes effect. Most elements of the intricate federal program begin Jan. 1, 2014, but in the meantime, Congress set aside $5 billion for high-risk insurance, to ensure coverage for those who have preexisting conditions.

            Some 35 states already have high-risk programs, Washington among them. But many have waiting periods before coverage kicks in. States are being asked whether they want to operate the program themselves or leave it to the feds, and Washington is one of the states taking Congress up on the offer. It will operate the program alongside the state’s existing insurance program, known as the Washington State Health Insurance Pool.

            The key differences? There won’t be a six-month waiting period before benefits kick in. Prescription benefits also will be more generous.

            None of the 3,578 people currently covered by the state program will be eligible for the new one, because the federal program is limited to those who have not had insurance for at least six months.

            Will be Expensive

            Right now the state insurance commissioner’s office is figuring that the premiums will about the same as the current program. Even though the feds will be providing $102 million to subsidize the insurance, the benefits will cost more, and right now the office figures thing will balance out. In terms of actual numbers, an adult age 45-49 pays about $900 a month with a $500 deductible. The policy costs about $400 a month with a $2,500 deductible.

            Insurance Commissioner Mike Kreidler and his staff outlined the program Wednesday at a meeting of the Health Care Reform Realization Committee, a public advisory panel convened by his office.

            Kreidler said he expects about 1,000 to 2,000 people to take advantage of the program. The state has to keep the rates high because the money has to last, he said. “We don’t want to throw it so wide open that we’ll break the bank,” he said.

            For now, the state is working on the details – determining exactly what the premiums will be, how contracts will be awarded. Money is available next month, but the start-date for coverage can come later. There isn’t much time left before the program has to launch, said deputy commissioner Mary Clogston, and the office is busy planning. “It’s all high-risk, all the time,” she said.

            Similar to Current Program

            The state’s own program has been in business since 1987, providing insurance to a class of customer no insurance company ordinarily wants to touch. Private insurance companies use a standard health questionnaire to screen out applicants for individual insurance who have preexisting conditions. Those customers are shunted to the high-risk pool. Premiums are substantially higher than standard insurance programs – the law requires them to be at least 10 percent higher than the industry average. No direct state subsidy is provided, though many of the participants have premiums that are paid through state or federal programs.

            Medical benefits are provided through First Choice Health.

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