High-risk pools offer coverage to Californians with pre-existing conditions

Maryalene LaPonsie | July 6, 2010

By: Maryalene LaPonsie

California Governor Arnold Schwarzenegger may be best known for taking down robots from the future in The Terminator, but now he has set his sights on medical coverage denials. On June 29, 2010, the Governor signed into law bills that make California eligible for some $761 million to administer a state high-risk pool. The money is part of a larger $5 billion set aside by Congress to create medical insurance options for those with pre-existing conditions.

How pre-existing conditions affect family health insurance

Current figures vary, but it is believed that some 700,000 individuals nationwide are unable to find medical insurance because of pre-existing conditions. We're not talking about affordable health insurance premiums--those with pre-existing conditions are often unable to find any health insurance coverage, period.

While group insurance plans cannot turn down individuals for a pre-existing condition, individual health plans can and do. For the unemployed, self-employed or those working at businesses not offering health benefits, individual health insurance is the only option. Add in a little diabetes, a cancer scare or maybe some run-of-the-mill asthma, and these families are virtually uninsurable.

When federal health care reform passed in early 2010, one of the goals was to provide a temporary solution for those with pre-existing conditions. These plans would be a short-term fix until 2014, when all insurers will be prohibited from denying medical coverage based on a pre-existing condition.

Medical insurance options in California

The health insurance solution for those with pre-existing conditions comes in the form of high-risk pools. These government-administered programs are open to anyone denied medical coverage because of a pre-existing condition. In addition, the new California plan requires that only those without medical health insurance for the last six months are eligible for coverage.

Although the federal government has a Pre-Existing Condition Insurance Plan (PCIP) that it will offer, California is one of 29 states that has chosen to administer its own high-risk pool. The state already offers a high-risk program, the California Major Risk Medical Insurance Program (MRMIP), which provides medical coverage to almost 7,100 Californians.

State officials plan to continue to offer the MRMIP to California residents. However, early estimates on the new pool's cost may make you wonder why anyone would want to stay on the old program. According to a PricewaterhouseCoopers report, an individual paying monthly premiums of $915 under MRMIP could see their health insurance cost drop to $575 per month under the federally mandated high-risk pool.

It is expected that the new federal plan will have more price restrictions for coverage and will include the following expenses for consumers:

  • Annual deductible of $1,500
  • Annual out-of-pocket limit of $2,500
To be eligible, you must:

  • Be a citizen or legal resident of the United States
  • Be uninsured for the previous 6 months
  • Provide proof of a health insurance denial because of a pre-existing condition
Early estimates indicate that 25,000-30,000 Californians will receive medical coverage through the new high-risk pool. Enrollment is expected to begin in August 2010.

To request additional information on the California plan, residents can contact the Managed Risk Medical Insurance Board.

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