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State rules clash with health pools

POLITICO, July 20, 2010

In the early implementation of health reform, states with the most progressive health policies are having a more difficult experience than others locking down a share of the $5 billion of federal funding for new high-risk pools. Five states — Vermont, Maine, New York, New Jersey and Massachusetts — have “guaranteed issue” of insurance: individual subscribers cannot be turned away because of a health condition. Moreover, all five states have some form of community rating, which bars insurers from charging exorbitant rates based on health, gender and other factors. These programs have generally been considered a boon to the uninsured, making coverage more affordable. But, in the context of the high-risk pools, the programs appear to be more of an obstacle, as there are likely to be fewer residents who have trouble obtaining insurance in these states and, therefore, less demand for the federally funded high-risk plan.