Pamela A. MacLean
Newswire21.org

Only 1 in 20 Americans who can't buy insurance due to pre-existing medical conditions join state-sponsored plans designed to protect them, according to a government study.

Roughly 4 million Americans are eligible for the state-run high risk health insurance pools, but fewer than 200,000 are covered, the Government Accountability Office reported.

Typical enrollees are 49 years old and keep the insurance about three years. Roughly half are employed and have a household income of $41,000. Thirty-five states now offer the plans and a few have waiting lists. Florida's plan has been closed to new enrollees since 1991.

The national health reform proposal would expand the pools as a means to include uninsurable people, and that may prove expensive. The state plans are typically state-run nonprofit associations that contract with private health insurance carriers to administer the pool and offer a range of health options.

Federal grants amounted to approximately $286 million between 2003 and 2008.  In 2008, the federal grants were less than 2 percent of total pool funding, according to GAO.

Due to the higher health care costs by individuals in the pools, they typically operate at a loss. Total claims in 2008 wee about $1.9 billion, or about $9,437 in average claims for each enrolled individual.  That is up 39 percent from 2005, the GAO states.

Monthly premiums for enrollees have risen as well, up 14 percent between 2004 and 2008, from $425 to $485.  But the cost to run the programs vary widely from state to state and options are typically more expensive for enrollees than people covered by employer-sponsored health plans.

Rates Vary
The average monthly premium for a 50-year-old male non-smoker ranged from a low monthly premium of $275 in Indiana to a high of $848 in Oklahoma, followed by $811 in Wyoming and $802 in Connecticut. 

The states topping the list for the most in paid claims were Texas at $263 million, Minnesota at $245 million and Illinois with $156 million.  

The average annual deductible in a health pool is three times as high as the average in an employer-sponsored program: $1,593 for state pool enrollees, but $560 annually for employer plans. 

Some 90 percent of the pools imposed lifetime spending caps on coverage of $500,000 to $5 million, while just over half of employer-sponsored plans imposed lifetime caps.

 Benefits vary as well.  While nearly all employer plans cover prescription drugs, mental health services and transplants, just one-third provide those services.

The GAO also noted that the state nonprofit association boards are dominated by representatives from the health insurance carriers, representing 41 percent of the board members, followed by state representatives at 13 percent.  Other board members include medical providers, enrollees and employers.