High-risk insurance pools: Scalise & insurance expert weigh in

NEW ORLEANS, LA (WVUE) - The bill that U.S. House Republicans approved last week would help states set up high-risk pools to allow people with pre-existing illnesses get health coverage. While the idea is not new to Louisiana, a local industry veteran doesn't think putting sick people in a pool is the answer to lowering premiums.

During an interview with FOX 8 News, GOP House Majority Whip Steve Scalise, R-Metairie, said the goal of the American Health Care Act that now awaits U.S. Senate action is to protect consumers, including those with chronic and serious illnesses.

"Years ago, insurance companies could deny you care if you had a pre-existing condition, and they can't do that anymore and our bill preserves that protection," said Scalise.

He said the bill offers layers of protection.

Still, the legislation allows states to seek federal waivers to basically opt-out of most regulations of the Affordable Care Act which is currently in effect and let insurers charge higher premiums to people with pre-existing conditions.

However, Scalise said if such individuals already have coverage and don't let it lapse, they would be shielded.

"Even if a state chooses to get a waiver, and the governor would have to ask for a waiver, from certain mandates from Washington they can never waive what's called continuous coverage, and that means somebody with a pre-existing condition that's in the health care marketplace today, even if the state got a waiver, those people will not be impacted by the waiver," said Scalise.

States receiving the waivers would also be required to set up high-risk coverage pools with the help of billions in federal funds. Initially, the Republicans' bill provided $130 billion over nine years, and then more was added.

"We put $8 billion to put an extra cushion, so that even if you chose not to get coverage and you had a pre-existing condition, this will help buy down your premium so you can get back into the health care marketplace," said Scalise.

"It would have to be a state-by-state decision, and quite honestly I think it would be political suicide for the states that do it in a precarious manner," said Wayne Schellhaas, owner of Wayne Schellhaas and Associates Insurance Agency.

Schellhaas has been in the insurance business for 45 years and held top position with a trade group. He said a strong incentive is needed to attract young, healthy people to buy coverage to help offset the expenses from the sick.

"Something needs to be done to keep people from popping in and out of coverage and only wanting to pay for coverage when they get sick. That's part of the problem why Obamacare has failed, so to speak," he said.

High-risk pools are not a new idea. According to the Kaiser Family Foundation, which researches health care issues, before the Affordable Care Act was passed and implemented under then-President Obama, Louisiana was among 35 states offering a high-risk pool to give people with no other opportunity to buy coverage an avenue for health insurance. It was called the Louisiana Health Plan, but it shut down in 2013 because protections for people with medical conditions were available under the Affordable Care Act.

Schellhaas knows well how the previous high-risk plan operated.

"You had to get a decline letter from two different insurance carriers showing that they would not accept you, and at that point in time then you could file and pay premiums to get in a limited benefit. It had a very low cap, it had a maximum cap of $100,000 which you can go through that in two weeks in the hospital these days," he said.

And Schellhaas said he is not a fan of any proposal that would segregate people with pre-existing illnesses from people who don't have serious medical conditions.

"I think a better solution to high-risk pools is to put everybody in one pool. The more people we have and the bigger pool we have, then it's asking a spreading of risk. To lump just sick people in a specific area I don't think is a good idea," said Schellhaas.

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