Enrollment in high-risk insurance pool lags predictions

Good health insurance has been hard to find for Vivian Brown.

Because of her high blood pressure and glucose levels along with a history of back pain, private insurance rates ran $600 a month.

That's difficult for Brown to budget from her income, working as a dental hygienist on a contract basis and selling Italian lamps out of her Chesapeake home.

When she heard about the national health law's new pre-existing condition insurance plan, Brown thought she may have found a solution.

Research showed it was her best option, with a premium around $400. But the $2,500 deductible was a deal-breaker.

"I couldn't afford at that point to go on it," said Brown, who is in her 50s.

One of the first changes brought about by the federal health-care overhaul, the temporary national high-risk insurance pool has grown slowly, with enrollment and spending in the program's first 10 months significantly behind expectations, according to a July report by the U.S. Government Accountability Office.

But federal officials said they weren't surprised that the plan is taking time to catch on. They've changed it to attract more people, including reducing premiums, making it easier to prove a pre-existing condition and paying referral fees to agents and brokers.

The program's director, Richard Popper, said the changes are working.

"We know we have capacity for tens of thousands more enrollees in the program at a minimum," Popper said. "We're focused on getting the word out and making the program more usable so that more and more people continue to enroll in the program and benefit from it."

The Pre-Existing Condition Insurance Plan is meant to provide health coverage for people denied insurance or quoted extremely high rates because of their medical conditions. The program is scheduled to run until 2014, when private plans would be prohibited from excluding people because of pre-existing conditions.

Virginia and 22 other states opted for the federal government to run their plans. The remaining states - some of which already ran high-risk insurance pools - manage their own.

Congress set aside $5 billion to fund the plan, but some predicted the money wouldn't be enough to serve as many as 375,000 people nationwide who would sign up.

Just under 34,000 people had enrolled by the end of August, according to the U.S. Department of Health and Human Services. The plan had spent $180 million through the end of May, its first 11 months, according to the department's most recent figures.

Some have hesitated to sign up because the premiums were difficult to afford, the GAO report found. Some were deterred by the requirement that enrollees be uninsured for six months. Another obstacle: The public's lack of awareness of the plan.

About half of the people who submit an application end up enrolling, Popper said.

"This program required us to actually sell a product, because people have to pay a meaningful premium to be in the program, and they have to choose whether this is a good option for them," said Popper, who formerly ran Maryland's high-risk insurance pool. "It's also a brand-new product that's never been available to people locked out of the insurance market."

Popper's office, the Center for Consumer Information and Insurance Oversight in the Health Department, started adjusting the federal pool in its first six months.

For people enrolling in 2011, officials introduced three different plan designs and a child-only rate.

This summer, they reduced premium prices, saying it would bring the rates closer to those in each state's individual insurance market. In Virginia, the decrease was about 40 percent, lowering monthly premiums to a range between $93 and $401.

The program also started accepting letters from health providers to confirm a pre-existing condition. Previously only an insurance company's denial letter filled the requirement.

This fall, the Department of Health and Human Services started paying agents and brokers for successfully connecting eligible people with the program.

Enrollment has picked up in recent months, Popper said: "We expect to continue at the rate we're going, which is 1,000 net additional members every week."

About 40 percent of the federal pool's members are between 55 and 65, and more than half of the claims went to treatments for cancer and heart disease.

The plan has helped Tara James get treatment for psoriatic arthritis.

The 38-year-old Virginia Beach hair designer was diagnosed with the disease in 2007. A year later, her family of five lost their health insurance after her husband Jeremy was laid off from a pesticide and lawn maintenance business.

Private insurers told James it would cost about $732 a month just to cover her in an individual plan.

Her family borrowed money to pay for insurance, then went on Medicaid. After Jeremy started his own business, she and her husband no longer qualified for Medicaid because the family's income rose.

James believes she was among the first to enroll in Virginia's pre-existing condition insurance plan.

Her monthly premiums started at $314, but now she pays $168 because she reached the out-of-pocket limit in one of the new options, the standard plan.

James has had coverage for visits to her rheumatologist, orthopedic surgeon and primary care physician, and she's had help paying for at least five prescription drugs. She's had neck-fusion surgery and, earlier this month, another surgery to remove a screw from a spine-fusion procedure.

Without that care, James believes she would be unable to walk normally and unable to work.

"It's given me a chance to work and get us out of debt," she said. "It's given me a new lease on life."

Amy Jeter, (757) 446-2730, amy.jeter@pilotonline.com