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Some states decline to run new federal high-risk pools

Fifteen governors have reportedly informed the federal government they will not take part in managing high-risk health insurance pools in their states.

The pools, mandated under the Patient Protection and Affordable Care Act of 2010, are to be launched within 90 days and will provide temporary insurance to individuals denied coverage due to pre-existing conditions. The law allows state governments to run them or to opt out of the program, allowing the federal government to administer the pools.

Idaho Gov. Butch Otter, a Republican, said he is opting out because, "put simply, Idaho cannot afford to subsidize a second high-risk pool program, especially during these difficult economic times."

But according to Idaho's state AARP director Jim Wordelman, Otter's move "is not an opt out, but a cop out."
The cost of the pool will be covered completely by the federal government, Wordelman said.

"Managing this program at the state level would have given Idaho a better opportunity to ensure it meets the needs of the growing ranks of those who can't get health insurance," he said.

Wordelman said the state's existing high-risk pool costs 25 percent more than the standard rate for health insurance, leaving only 1,500 of the state's roughly 34,000 eligible residents able to afford it. The new pool would provide $24 million to ensure that residents with pre-existing conditions aren't priced out of the market until it becomes illegal to deny them health insurance in 2014.

Nevada has also chosen to opt out. Republican Gov. Jim Gibbons said he based his decision on counsel from state stakeholders who also say the funding is "grossly inadequate."

This isn't the only time states have opposed the healthcare reform law. Some 35 states are considering legislation to oppose the healthcare reform law, and some have threatened to sue the federal government over its constitutionality.

Vernita Bridges-McMurtrey, board chairman of the National Association of State Comprehensive Insurance Plans, said the 34 state plans with existing high-risk pools are uniquely positioned for the job of reform.
"There is no question in our minds that we can accomplish this first leg of health reform better, faster and less expensively for the national risk pool," she said.