California’s High-Risk Pool Is Not Working

California’s High-Risk Pool Is Not Working

California’s high-risk pool for medically uninsured residents, MRMIP, is in trouble – poorly funded and lots of eligible folks are on the waiting list to enrol – according to the Los Angeles Times.

The article notes that other states, with more successful progams, assess levies on health plans to fund high-risk pools, whereas California relies on tobacco funds. Well, we already know that tobacco taxes are ineffective in funding health care.

Assessments on health plans are ultimately paid by their privately insured beneficiaries, of course. The question is: how best to raise such funds with minimal disruption to the currently insured?

The article notes that the governor previously vetoed AB2, a bill recommended by MRMIP’s board that would have taxed health plans one dollar per month per privately covered beneficiary. The governor recognized that this was simply a cost-shift that did not get to the root of the problem.

A better solution is SBX1 27, sponsored by senator Aanestad, a physician. I am not an unqualifed supporter of the bill, which is currently tabled in the senate health committee, but it has a number of good elements. First, it would allow health plans who offer policies through MRMIP to offer low-premium, consumer-driven plans with Health Savings Accounts. (One woman in the LA Times article, who is covered by MRMIP, actually has low annual medical costs. Such a plan would likely be great for her.) Second, it would allow plans to charge higher premiums for smokers and the obese, injecting an element of personal responsibility into MRMIP.

(A good source on high-risk pools is the National Association of State Comprehensive Health Insurance Plans.)

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