WASHINGTON -- As many as 20 states likely will not operate new insurance programs for Americans who have been denied health coverage, forcing the federal government to step in and placing a new burden on the Obama administration to implement its health overhaul, according to administration officials.
Democrats earmarked $5 billion in the recently passed health care legislation to create state-based, high-risk pools as a way to help sick, uninsured Americans between now and 2014, when new insurance regulations will prohibit insurers from denying coverage to people with pre-existing medical conditions.
But a succession of mostly Republican state officials led by the Georgia insurance commissioner have been rejecting the idea of creating state pools, voicing concerns that state governments would end up having to pay some of the costs of operating the pools over the next 3-plus years.
"We are very concerned that funding will not be sufficient," Nebraska Gov. Dave Heineman, a Republican, wrote to Secretary of Health and Human Services Kathleen Sebelius this week, explaining his decision to opt out of the program.
By Friday afternoon, a deadline set by Sebelius, 15 states had informed the Department of Health and Human Services that they would not set up new pools, including South Carolina, Minnesota and Wyoming.
Twenty-eight states, including California, New York and Illinois, indicated they would set up their own pools.
In the Capital, administration officials said they are preparing to operate the pools in any state that chooses not to participate and expect to be able to fund all the programs without putting new burdens on states.
"The goal of the temporary high-risk pools is to help people who haven't been able to get coverage ... by setting up programs or working to fund state programs with 100 percent federal dollars. We anticipate that we will meet this goal," Health and Human Services spokeswoman Jenny Backus said in a statement.
Consumers will be eligible for the new pools if they have a pre-existing medical condition and have not had insurance for at least six months.
They will pay premiums that parallel rates being offered by commercial insurers to healthy people on the individual market. Many existing high-risk pools charge such high premiums that many people cannot afford the coverage. Today, high-risk pools in 34 states cover only about 200,000 people.
Individuals who sign up for the new pools also will not have to pay more than $5,950 a year out of their pockets for medical care, according to the legislation.
The high-risk pools were a central feature of several Republican healthcare proposals. And in a nod to Republicans, who voiced concerns about the expansion of federal authority, Democrats gave states the option to operate the pools themselves with federal money or have the federal government do the job.
States that have elected to have the Department of Health and Human Services run the high-risk pool program:
-- South Carolina
-- McClatchy-Tribune Information Services