published Monday, June 7th, 2010

Tennessee, Georgia to forgo federal plan


by Emily Bregel
Audio clip

Joe Burchfield

Tennessee and Georgia for different reasons will not join with the federal government to administer a temporary program to insure people with pre-existing health conditions.

At least 19 states have decided not to participate in the high-risk insurance plan, according to the National Conference of State Legislatures.

Tennessee is one of 34 states that already has its own high-risk insurance program, AccessTN. According to Gov. Phil Bredesen's office, that plan could offer consumers more choice by running parallel with whatever federal plan is set up.

FUNDING RISK POOLS

The Department of Health and Human Services has allotted $117 million for Georgia and $97 million for Tennessee to set up temporary high-risk insurance pools.

WHO IS ELIGIBLE?

Eligibility requirements for the temporary high-risk insurance pool include:

* Being a citizen or lawful resident

* Being without creditable coverage for six months before applying

* Having a pre-existing condition

Benefits/coverage must have:

* Actuarial value of at least 65 percent of total allowed costs

* Out-of-pocket limit no greater than the amount for high-deductible health plans ($5,950 for an individual)

* No pre-existing condition exclusions

Premiums must:

* Use age-rating of no more than 4-to-1 (oldest enrollee can't pay more than four times more than the youngest)

Source: U.S. Department of Health and Human Services

Gov. Bredesen's term is expiring and he has said he wants to avoid constraining the next governor by making this kind of long-term commitment, said Joe Burchfield, spokesman for Cover Tennessee, a state insurance program that includes AccessTN.

"Even with declining to administer this plan, people in Tennessee are going to still reap the benefits of the federal high-risk pool. ... It's just not something that's going to be administered by the state," Mr. Burchfield said.

AccessTN has 3,891 members and is open to new enrollment, he said.

In Georgia, Insurance Commissioner John Oxendine said he decided to opt out of the federal pool based more on state leaders' belief in the unconstitutionality of reform legislation. He also fears the program is underfinanced and the state would end up shouldering a hefty financial burden if it agreed to administer the plan.

"We're laying off schoolteachers; we're having trouble paying for state troopers on the highway," Mr. Oxendine said. "I think it is folly to go and create a new entitlement program that the state treasury could be on the hook for."

BRIDGE SOLUTION

The high-risk programs are intended to bridge a coverage gap for people with pre-existing medical conditions until 2014, when new rules will prevent insurers from denying coverage based on health status.

Federal officials envisioned partnering with states to create a temporary high-risk pool, or to put new federal dollars into existing pools. If states won't participate, the feds will work with other state or regional nonprofits, according to the U.S. Department of Health and Human Services.

Some in the medical field say opposition to the plan based on financial concerns is misguided.

Dr. Leonard Reeves, of Rome, Ga., president of the Georgia Academy of Family Physicians, said putting up funds to cover those with chronic conditions will save money in the long run.

"Let's just face it: If somebody has diabetes or a heart condition or high blood pressure or some other chronic diseases, they will be faced with higher health care bills in the future anyway" if they don't manage those conditions, he said.

"If we can get coverage for these high-risk people, then we can keep them as productive members of society longer, paying into the system, rather than being an extra cost to the system," he said.

Others, like Mr. Oxendine, contend that the $5 billion in federal money allocated for high-risk plans won't nearly cover costs and that states ultimately will be pressured to cover the difference.

In December, an estimate from the Department of Health and Human Services' Office of the Actuary said there won't be enough federal money to last through 2014.

Based on estimated enrollment of 375,000 people this year, the office calculated that federal funding would run out by 2011. That will result in "substantial premium increases to sustain the program," the report said.

In Tennessee, health reform advocate Tony Garr was disappointed that the governor declined to join the federal government, but he praised AccessTN.

"Tennessee's high-risk pool has been, I think, a pioneer and has been creative in regards to its design," said Mr. Garr, executive director of the Tennessee Health Care Campaign. "It seems to me that could have been even enhanced for everyone if we could have folded the federal money into the current high-risk pool."

AccessTN allows preventive and primary care services to be covered immediately under its health plans, while other states' programs require a six-month waiting period, he said.

Mr. Burchfield said the program also offers premium assistance, which 90 percent of enrollees use.

about Emily Bregel...

Health care reporter Emily Bregel has worked at the Chattanooga Times Free Press since July 2006. She previously covered banking and wrote for the Life section. Emily, a native of Baltimore, Md., earned a bachelor’s degree in American Studies from Columbia University. She received a first-place award for feature writing from the East Tennessee Society of Professional Journalists’ Golden Press Card Contest for a 2009 article about a boy with a congenital heart defect. She ...

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