Utah is telling the federal government it’s not willing to take on more of the risk and the cost of insuring people with pre-existing health conditions. The US Department of Health and Human Services wants to cap federal spending on state-run high-risk pools because they are running out of funding. The Utah Governor’s office has until Friday to decide whether to absorb those costs in the state, or transition enrollees into a federal program – which they say will cost more out of pocket.
The federal Affordable Care Act mandates that insurance companies are not allowed to deny coverage to anyone. But that doesn’t go into effect until January 2014. In the meantime, what to do with the people rejected by insurers because they’re too expensive to cover? That’s where Utah’s state-run high-risk pool comes in. Governor Gary Herbert agreed with US Health and Human Services to administer the program using federal funds in 2010. But now HHS says they’re running out of money, and they want to put on a cap on how much states can receive. The Governor’s Health Reform Coordinator Robert Spendlove says that means Utah will have to absorb extra costs.
“The governor was very clear back in 2010 when he agreed to do this – that the state would assume no financial cost and we would assume no financial risk in administering this program, and the Governor’s position has not changed on that at all,” Spendlove says.
The Governor’s Office told HHS this week that they would be willing to maintain the existing program only under the current contract with no changes. But HHS said that’s not an option. Spendlove says the 1300 people currently enrolled in the state-run high-risk pool may have to transition to a federal program.
“If they won’t give us the flexibility that we need, we will have to walk away, and those people are going to be in a difficult position trying to transition from a state run program to a federal program,” Spendlove says.
He says that means enrollees may have to change providers, and would likely pay more in premiums and out-of-pocket costs. Spendlove says the other possibility the state would consider is for the contracted insurer who runs the Utah pool – SelectHealth - to take on 100 percent of the risk. The federal government has asked states to inform them of their plans by the end of this week.