State OK's fed health plan for those in high-risk pool

Washington state will administer an interim federal insurance plan for people with serious health problems, despite already having a similar statewide high-risk pool plan in place.

With the new federal health-reform law rolling out, Friday is the deadline for states to tell the feds how they want to handle a federally subsidized high-risk pool, to begin July 1.

The program is meant to help bridge the period until 2014, when the new law requires insurers to take all applicants, regardless of pre-existing conditions that can disqualify them from obtaining regular insurance.

"We cannot afford to miss this opportunity to provide much-needed coverage to our uninsured," Washington State Insurance Commissioner Mike Kreidler said Thursday.

Several states, citing worries that the federal pool would become a financial liability for state taxpayers in the three years before full-scale health reform kicks in, have rejected the feds' offer, despite the federal subsidy attached to the program.

Others, like Washington, have struggled with the complexities of having to administer two plans that appear to target the same people, but have different qualifications, premium structures and possibly benefits.

Gov. Chris Gregoire's health-policy adviser, Jonathan Seib, said the federal subsidies, though limited, could provide assistance that would not otherwise be available to people with pre-existing conditions.

"We will manage the program within the dollars available — $102 million over three years," Seib said.

Montana, Pennsylvania and Wisconsin, among others, have also accepted the deal to operate the program under contract with the federal government.

Washington's existing high-risk pool, called the Washington Health Insurance Pool, is open only to people who apply for individual insurance and are rejected by health insurers.

The plan is run by a private nonprofit. Although premiums are limited, they are still too expensive for many.

The federal high-risk pool will be open to those who have gone without insurance for six months or more.

Exactly what benefits it would cover and how much it would cost are unclear at this time, but Congress has allotted $5 billion nationwide for the pools.

Some states, including Nebraska and Georgia, have opted out of the federal plan, saying they worry that federal support plus premiums wouldn't cover medical and administrative expenses, causing the plan to become insolvent over the next three years.

John Oxendine, Georgia's insurance commissioner, told Department of Health and Human Services Secretary Kathleen Sebelius in a recent letter he was concerned the program would become an "unfunded mandate" whose costs ultimately would be borne by state taxpayers.

Carol M. Ostrom: 206-464-2249 or costrom@seattletimes.com. Information from The New York Times was used in this report.