LITTLE ROCK — A federal program for “uninsurable” Americans with pre-existing conditions is drawing sluggish response in Arkansas and across the country.
Arkansas has enrolled 117 since Aug. 1, when it started accepting applications for the Pre-Existing Condition Insurance Plan. Roughly 150 people have applied, officials said.
At that rate, the plan won’t meet the cap set by the state of 2,500 for the first year. Officials had feared the program could exceed its funding.
“We haven’t yet been able to put our finger on why people are not [applying],” said Mike Wilkinson, chairman of the Arkansas Comprehensive Health Insurance Pool (CHIP) board.
Every state must have one of the federally funded pools under the health-care overhaul legislation signed in March by President Barack Obama. Like Arkansas, most states are administering their own programs, but 23 states have left the responsibility to the U.S. Department of Health and Human Services.
Wilkinson’s pool board, which oversees a similar state plan that was created in 1995 and has 3,000 members, helped set up Arkansas’ chapter of the federal program. Enrollees in the pool plan, which generally features higher premiums and deductibles, are ineligible for the federal plan because it requires that applicants have been uninsured for six months. Both plans are aimed at people who have been denied coverage because of pre-existing conditions.
Officials in Arkansas and other states speculate that the federal plan still could be too expensive for many people, or that people may be waiting until the program ends Jan. 1, 2014, and the overhaul gives insurance subsidies to many people. Another possibility is that some people have dropped their coverage and are waiting to meet the requirement of being uninsured for six months.
Premiums range from $156 to $624 per month, deductibles are $1,000 a year and the out-of-pocket limit is $2,000 for in-network services.
Such rates are “still a lot of money if you’re making the minimum [wage] working 40 hours a week,” said Mike Castleberry, a board member.
Castleberry believes some uninsured people may be waiting until they’re hospitalized, or their condition deteriorates in another way, before enrolling.
Arkansas will receive $46 million in the $5 billion national plan. When the plan expires, there will be “exchanges,” marketplaces where benefits and prices can be compared easily.
OTHER STATES
Plans in other states also have drawn less response than anticipated, especially since the plans are much cheaper than they would be in the private market for people with preexisting conditions and less expensive than the comparable state plans, officials say.
September applications were less than 200 in most states, said Amie Goldman, who is chairman of a national association of state plans similar to Arkansas’ pool plan.
Wisconsin has 221 members, Goldman said last week. The Associated Press reported earlier this month that California has slots for about 20,000 people, but had less than 450 applicants.
In Oregon, despite “a tremendous amount of media coverage” this summer for the federal plan, fewer applications have been received in recent months for the federal program and a state program, Oregon Medical Insurance Pool, than the state typically sees at this time of year for the state program alone, according to Don Myron, a development specialist for the pool.
As of Oct. 1, the state had 222 enrolled in the federal program, Myron said.
“My best guess is just that health insurance is expensive,” said Myron, in explaining the slow demand. “People are maybe waiting [to buy insurance] until those federal subsidies start rolling out in 2014 for individuals.”
North Carolina has 509 members, although its plan is capped at 8,000, said Michael Keough, executive director of Inclusive Health, a nonprofit set up by North Carolina to runits program.
Little Rock resident Glenn Nishimura, 61, who actively campaigned for the health-care overhaul, said that the federal plan is an improvement over the state pool because it has a much lower deductible - but that it remains too expensive for him.
Nishimura would seem an ideal candidate for the new coverage. A “borderline” diabetic, he has been turned down by five insurers and has been without coverage for about 18 months.
But he says his erratic income as a consultant for nonprofit groups and his current state of health are factors that weigh against signing up.
“My health-care bill last year probably didn’t go over $1,000 cash, but of course you take the risk of catastrophic illness. So you just have to make a calculation. Do I have $7,500 [a year] to pay for insurance if my health is very good?”
MARKETING COSTS
Castleberry, the Comprehensive Health Insurance Pool board member, said Arkansas may consider lowering rates for its federally funded pool, something federal officials have recently said is allowable. He also may suggest adding about $6,000 to $8,000 for marketing, because $4,000 has been exhausted.
Like many other states, Arkansas has focused on low-cost marketing, such as getting the word out to insurance brokers and hospitals. The pool board also may ask the insurance department to ask insurers to mail a notice of the program to people denied coverage, Castleberry said.
Some states are spending much more to increase enrollment. North Carolina, for example, is spending $500,000 in its first year for TV ads, billboards and other efforts.
Goldman said that Wisconsin for now has budgeted $250,000 for marketing and outreach, which includes a contract awarded to an advertising firm two weeks ago.
Although the state is buying some radio ads, $250,000 wouldn’t “get very far” in mass media ads, she said, so much of the marketing will be focused on educating people who are credible sources of information in the lives of potential enrollees, like nurses. Speaking events provide another strategy, she said.
Oregon has distributed information to insurance agents in the states about the pool and doesn’t plan a paid media campaign.
“One way to look at that is if you’re expecting to cap a program in less than a year, why would you try to drum up the gate-shutting any earlier?” Myron said.
However, he acknowledged that it’s uncertain that the state will fill up as quickly as originally thought.
Arkansas’ plan is administered through Blue Advantage Administrators. For more information, call (800) 285-6477. More information also is available at www.healthcare.gov/ law/provisions/preexisting/ states/ar.html.
Business, Pages 77 on 10/24/2010