High-risk patients may be stuck paying high rates

High-risk patients may be stuck paying high rates

Published May 14, 2010

CHICAGO – For thousands of Illinois residents who pay high health insurance premiums because of medical problems, the new federal health care legislation won't offer relief.

The 16,000 residents who already pay into Illinois' high-risk health insurance pool will keep paying high rates, while others who enroll this summer under a new, similar program will get coverage at much lower, more reasonable prices.

Illinois is among the states that have told the federal government they want to take part in the new high-risk pool program, an early component of the U.S. health care overhaul law. Illinois hopes to start enrolling people in the new program in July.

The federal government has $5 billion for the state pools, which will help people with pre-existing conditions get coverage until 2014, when insurance companies will no longer be able to deny them coverage. The law requires that the new, temporary pools charge no more than standard rates.

But only people who have been uninsured for six months are eligible — meaning those in the current state pool can't switch and save.

Julie Kramer, 53, is feeling a bit cheated. She's paid high premiums — about $700 a month — for nearly seven years into Illinois' high-risk pool.

"It feels very unfair. It goes against the spirit of what health care reform was supposed to be," said Kramer, a self-employed writer and owner of Full Moon Marketing Communications in Vernon Hills. "This does seem like a low blow."

The existing program is called the Illinois Comprehensive Health Insurance Plan, ICHIP. Thirty-four other states have similar programs.

By state law, people in ICHIP pay 25 to 50 percent more than standard rates. The average annual premium has increased about 20 percent over the past five years. A 62-year-old woman now pays about $1,000 a month for a plan with a $500 deductible.

Premiums depend on the size of the deductible, where the enrollee lives, gender and age. The average annual claim cost per enrollee was $10,433 last year. Premiums pay for about 60 percent of the $174 million program. An assessment on insurers contributes about 23 percent and the rest comes from state and federal money.

Kramer's deductible, which she has to pay out of pocket before insurance kicks in, is $1,000. Last year, her medical expenses didn't reach that amount, so she paid all her medical bills herself.

Illinois Department of Insurance Director Michael McRaith understands Kramer's frustrations. To even the playing field, he said, the state Legislature would have to act to reduce ICHIP premiums and achieve what he called "premium fairness."

"I and the board of directors for ICHIP and Gov. (Pat) Quinn are very supportive of the current enrollees and share the concern of the current enrollees," McRaith said. "We want to be as fair to the current enrollees as possible."

Illinois expects to receive nearly $200 million from the federal government to start the new high-risk pool. The insurance department estimates that would be enough to cover about 5,000 people in the new plan, McRaith said.

That's far fewer than the number of people who may qualify. A 2008 U.S. Government Accountability Office report said about 218,000 people might be eligible for a high-risk pool in Illinois.

On the ICHIP website, a letter to enrollees explains "it's unlikely that the federal funds will be available to reduce premiums paid by current ICHIP enrollees."

The letter hasn't been mailed because the program can't afford the $5,000 postage.

"We have not mailed that letter," McRaith acknowledged. "The cost of mailing was prohibitive given that we have at this point not received the (federal) funding. It would be inappropriate to withdraw funds to send a letter."

Kramer read the letter on the website after being told about it by a reporter.

"I did feel a little flash of anger and disappointment when I read it," she said.


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Written by CARLA K. JOHNSON, AP Medical Writer


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