GOP’s Revised Health Care Bill Borrows an Idea From Maine

May 3, 2017

As House Republicans in Washington work to garner enough votes to pass a revised health care bill, one sticking point is whether to continue to provide affordable coverage to people with pre-existing conditions.

In his Sunday appearance on “Meet The Press,” Vice President Mike Pence said that Republicans are borrowing an idea from Maine that would cover high-cost patients while keeping premiums down. It’s called an invisible high-risk pool.

It started in 2012, just a couple years after the Affordable Care Act became law but before the online marketplace was up and running. Mainers who applied for health insurance, whether through their employer or as an individual, had to fill out a questionnaire about their health.

If they had certain medical conditions, they were placed into a high-risk pool — a pool of consumers with more expensive health costs. But the consumers didn’t know if they were in this pool because their policy and premiums didn’t increase, hence the term “invisible.”

The cost of their more expensive health bills, says independent health policy consultant Mitchell Stein, were paid by a different entity

“The act of paying claims would be taken over by MGARA,” he says, which stands for the Maine Guaranteed Access Reinsurance Association.

MGARA paid claims for these high-cost patients from a pot of money that came from the premiums within that high-risk pool, as well as from a $4 a month surcharge on all policyholders in the state.

It was just one part of a larger health reform law, which makes a straight-up assessment difficult, but, Stein says, “The ‘invisible high-risk pool’ is a great theory and can be an appropriate way to handle these things.”

That’s also how Maine’s Bureau of Insurance Superintendent Eric Cioppa views it.

“Well, it seemed to be very effective,” he says.

The program was brief — it was suspended after about a year and a half, when the Affordable Care Act was implemented in Maine. But Cioppa says Maine’s invisible high-risk pool did keep costs down in the individual market.

“During that time period, the one rate filing Anthem made, they said the rate of increase would have been over 20 percent, but it was under 2 percent when they considered the effect of MGARA,” he says.

But one critical component of Maine’s invisible high-risk pool, says Steve Butterfield of the Maine-based advocacy group Consumers for Affordable Health Care, is that it was well-funded. And he says that’s something the Republican health care bill doesn’t do.

“It allocated $15 billion over 9 years for this program. And an analysis done on what this program would need showed that it would need $15 billion-$20 billion per year to have any kind of reasonable impact on premiums,” he says.

Butterfield says the idea to use invisible high-risk pools solves a problem that the revised GOP health care bill actually creates, because the bill would allow states to get waivers from Affordable Care Act rules that prohibit insurers from charging people higher premiums based on their health status.

“I don’t understand why it would be a good idea to, on the one hand, say, ‘Well, we’re worried about pre-existing conditions, so we’re going to throw not enough money at a problem we’re creating. At the same time we’re going to allow insurance companies to charge sick people more,’” he says.

And the invisible high-risk pool, Stein says, is just one small proposal within the larger health bill.

“There’s nothing inherently wrong with it, but it doesn’t really fix all the other problems of the bill,” he says.

Stein says those include changes to essential health benefits and cuts to the Medicaid program.