As a first step in implementing health reform, on April 2 Secretary of Health and Human Services Kathleen Sebelius asked state governors and insurance commissioners to work with the federal government to establish temporary high risk pools to provide affordable insurance for people with pre-existing conditions.

In a letter to governors, Secretary Sebelius laid out several options states will have to use $5 billion in the Patient Protection and Affordable Care Act to bridge the time from July 1, 2010 until January 1, 2014 when the insurance exchanges will be available.

Coverage will need to include at least a floor set of benefits established by the federal government.  Out-of-pocket costs are limited to $5,950 for an individual, and premiums cannot be set at more than the existing standard non-group rates.  There can be no exclusion for pre-existing conditions.

Governors were asked to respond with a letter of intent by April 30, 2010.  If a state does not want to participate in the program, the Department of Health and Human Services will provide the high risk pool services to needy individuals in that state. Read the rest of this entry »