U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius issued a letter to state governors and independent insurance commissioners, in which she asks each state to express any interest in participating in the temporary high risk pool program which has been established by the newly-enacted health insurance reform law.

Sebelius notes the temporary high risk pool program was created to help provide coverage to those uninsured due to pre-existing conditions. States may choose whether and how to participate in the program.

According to the letter, the States can consider the following options:

--Operate a new high risk pool alongside a current state high risk pool;

--Establish a new high risk pool (in a state that does not currently have a high risk pool);

--Build upon other existing coverage programs designed to cover high risk individuals;

--Contract with a current HIPAA carrier of last resort or other carrier, to provide subsidized coverage for the eligible population; or

--Do nothing, in which case HHS would carry out a coverage program in the state.

The statutory requirements for the pool regarding eligibility, benefits and funding include:

Eligible Individuals

--Must be a citizen or national of the United States or lawfully present in the United States;

--Must not have been covered under creditable coverage for the previous six months before applying for coverage; and

--Have a pre-existing condition, as determined by guidance issued by HHS.

Benefits/Coverage Details

--Must have an actuarial value of at least equal 65 percent of total allowed costs;

--Must have an out-of-pocket limit no greater than the applicable amount for high-deductible health plans linked to health savings accounts ($5,950 for an individual); and

--No pre-existing condition exclusions.

Premiums

--Must be established at a standard rate for a standard population (not to exceed 100 percent of the standard non-group rate); and

--Not have age rating greater than 4 to 1.

The states are asked to present HHS with a contact person by April 9, and submit a letter of intent by April 30, with anticipated timing for establishment of the program, and information on any State legislative decisions that would be needed in order to participate.

Secretary Sebelius' letter may be accessed at: http://www.hhs.gov/news/press/2010pres/04/20100402b.html

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