Health Insurance for High Risk Users

While the majority of adult Americans obtain health insurance through their employer or their spouse’s employer, almost 16% of Americans have no health insurance (according to a United Health Foundation survey conducted in 2006). Around 60% of Americans access healthcare through an employer, while a further 27% access healthcare via Medicaid. Of the remainder, most have individual health insurance.

Many of those who aren’t insured have been forced to forgo health insurance due to pre-existing medical conditions that mean health insurance companies consider them too high a risk to be eligible. People with pre-existing medical conditions typically struggle to find health insurance if they can’t rely on an employer-based healthcare plan, and have few options for finding insurance, even at a high price.
For the so-called uninsurable, the only option may be a state-run high risk pool that is designed specifically to provide health insurance for people who cannot obtain health insurance due to a pre-existing medical condition. Currently, 34 states operate these high risk pools.

How does it Work?

State-run high risk pools create a pool of people who cannot obtain individual health insurance. Each member of the group can obtain health insurance via a state-sponsored program, albeit at a higher rate than someone without a pre-existing medical condition.

Generally each member of a high risk pool can choose between an HMO, PPO, or FFS plan, each of which offers varying degrees of flexibility in the way an individual can manage their healthcare.

There are some drawbacks to this type of health insurance, however. The costs are high, and members of a high risk pool may pay up to twice as much for their health insurance as would someone who qualified for a conventional individual health insurance policy.

In addition, most high risk pools have a pre-existing condition exclusion period of between six and twelve months, meaning you must wait that long before being eligible to make claims for medical expenses.
However, for many people the alternative to the high risk pool is not health insurance at all, and that makes it an attractive option, since the costs of not being insured are potentially much greater than the cost of higher premiums.

Who Qualifies?

To qualify for a high risk pool, you must be a resident of the state where you are applying for coverage. In addition, you must also have at least one of the following:

* Proof that you have been rejected for health cover by at least one insurer
* Proof that you are currently insured at a higher premium cost than the high risk pool can offer
* Proof that your current insurance is rated or has a rider attached

In addition, some states include a reciprocity agreement that states you are eligible to apply if you have previously been enrolled in a high risk pool in another state (assuming you meet residency requirements for the new application).
People who are excluded include those on Medicare or Medicaid (and those who are eligible), and people who have reached their maximum benefit level for the plan. Some states have an enrollment cap and accept only a certain number of people.