Senate passes bills to create high-risk pool

June 28, 2010

By Daniel Weintraub

The state Senate has passed legislation to create a high-risk insurance pool for people who have been denied private coverage because of previous medical conditions.

The pool, which will be financed with $760 million in federal money, is the first tangible impact from the passage of federal health reform earlier this year.

It will be a temporary program, set to expire in January 2014 when insurance companies will be required to offer coverage to everyone regardless of their medical history.

Until then, people who have been denied coverage will be able to apply for insurance through the state-run, federally financed high-risk pool.

The state already manages a pool that covers about 5,000 people who couldn’t find insurance any other way. But by some estimates, between 400,000 and 800,000 Californians may be in this predicament.

The new federal money is expected to help cover 20,000 to 25,000 additional people, depending on how the program is structured.

The federal plan requires states to limit an individual’s out of pocket costs to just under $6,000 per year. But many of the other details are left up to the states.

SB 227, by Sen. Elaine Alquist, creates the pool and grants authority to a state board to set eligibility standards, premiums and cost sharing for the program. AB 1887, by Assemblyman Michael Villines, establishes the financing for the program and states that California must not be liable for costs beyond what the federal government is providing.

California’s current program helps consumers buy insurance through two private companies, Kaiser and Anthem Blue Cross. If those or other companies do not volunteer to participate in the expansion, the state is planning to hire an administrator to arrange for and pay for health services directly, according to an Assembly staff analysis of AB 1887.

Both bills passed on bipartisan votes and were sent to Gov. Arnold Schwarzenegger, who said he would sign them.

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