Wednesday, November 05, 2008

Better late...

[Welcome Kaiser Network readers!]
I bookmarked this a week or so ago, but just now had an opportunity to blog on it. The North Carolina Healthcare blog tells us that the Tar Heel State's high-risk health insurance pool is making a big splash. The pool actually opened its gates back on October 20th (an auspicious date, indeed). According to the NCH folks, "Inclusive Health, also known as the North Carolina Health Insurance Risk Pool (NCHIRP), provides affordable, individual health insurance coverage for North Carolinians who do not have access to an employer health plan and face higher premiums due to a pre-existing medical condition."
Now where have we heard about such plans before?
Coverage for folks who opt in will begin the first of next year. Rates are age, sex and tobacco-use based, and apparently offer several deductible choices. Frankly, the first two options look like rather generic co-pay plans, while the third could be an HSA plan, were it not for the deductible (too high to qualify). Indeed, they look remarkably like plans available from any number of insurance carriers, but with the benefit (?) of being guaranteed issue. The NCH blog folks assure us that, while it's not "part of the state government," it does operate "under the supervision and control of its Board."
The "fastest growing state pharmacy program?" I'm sure Mr Keough is a fine fellow, and well-qualified (although he's apparently a graduate of a lesser university), but that experience does not bode well for keeping costs down. And we know what happens when costs continue to rise.
And looking through the pre-enrollment screening process, we find some other items of interest. For example, in order to "buy in" to the plan, one must not be eligible for Medicare or Medicaid, must be a legal US resident (yay!), and "must not have access to group coverage as an employee or as a dependent of an employee."
That last is particularly telling: how many Tar Heel State group plans are about to go down in flames as employers dump their policies in favor of pushing their employees into the state's trough? And what happens to costs then? But Henry, you cry, that's not going to happen! Why don't you mention that one of the eligibility "triggers" is that I've been rejected or rated up for medical insurance?
True enough, and that will limit the pool a bit, but you've missed the one that pretty much negates all the others: "I currently have similar health insurance coverage but at a single rate higher than that offered through Inclusive Health."
"Unhealthy" (i.e. "highly rated) groups and individual plans are about to become history. And what happens when all these less than ideal applicants flood the state plan? Regular readers have already figured that one out.
Which is not to say that the plan is completely without merit. For one thing, the plan designs seem pretty reasonable (not too much fluff), and there's an interesting pre-ex limitation that appeals: "Inclusive Health will exclude charges or expenses incurred during the applicable waiting period following the effective date of coverage for any condition for which medical advice, care, or treatment was recommended or received during the 12 month period immediately preceding the effective date of coverage." That waiver goes for a full six months for folks who sign up right away, and for a year for those who play "wait and see." My guess is that the sickest will be the quickest (to join up). But the plan, in a nod to HIPAA, includes the standard 63 day window, which means folks who drop their existing plans for the Inclusive Health policy have immediate cover for pre-ex (which reinforces my prediction about what happens to exiting policies).
And what about those rates? Well, for the ubiquitous 35 year old male non-smoker (is there any other kind?), the rate for the lowest deductible plan is a hefty $358 a month. Add another $115 if the gentleman likes his Marlboros (that's a 25% rate-up which is pretty much in line with the industry). A non-smoking female at that age pays a whopping $502. But that's not even the most interesting part:
Look as I might, I could find nothing about maternity coverage, yay or nay, in the plan descriptions. Since this doesn't appear to be excluded, what's to stop a young, say 20-something, female who finds herself "in the family way" from jumping on board? If she's early on, and one of the plan's trailblazers, she'd be covered after six months (sooner, if she'd had recent prior coverage). And at less than $300 a month, she'd have full coverage at delivery.
Wonder what that will do to rates?
And yet. Of all the plans we've seen so far, this one seems to me closest to dealing in a realistic way with at least the delivery of a reasonable product. I am qute concerned about what will happen to rates when heavy users start inundating the system with claims, and of course the adverse effect it seems to pose to the commercial market. But it's also the one with the least amount of "moving parts," which makes it more attractive than any of the others we've seen thus far.
Time, of course, will tell.
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