INSURANCE POOL: NEW PLAN TO INSURE HIGH-RISK PEOPLE

A new state law setting up an insurance pool is expected to provide health insurance coverage for Missourians who can't obtain insurance or must pay extremely high costs for it.

The Missouri Health Insurance Pool is being set up through a law enacted by the Missouri legislature last year. The law requires the pool to be in operation by Jan. 1, but officials said it could be in operation by November.

"It's designed to help people who, because they have chronic health conditions or previous health problems, can't buy insurance on the market," said state Rep. Sheila Lumpe of University City, who sponsored the legislation creating the insurance pool.

But Richard Smith, a senior vice president at Blue Cross & Blue Shield of Missouri and chairman of the new insurance pool, said the pool also will provide coverage for those who are paying premiums that are at least 300 percent higher than the normal rates as determined by an independent actuary.

"If the normal rate is determined to be $300, then anyone paying $900 or more could elect to go into the state insurance pool," he explained.

Blue Cross and Blue Shield is Missouri's largest health insurer.

"We insure about 750,000 people," said Smith, who works for the St. Louis-based company. Blue Cross and Blue Shield of Kansas City insures about 250,000 people.

Lumpe said there are an estimated 30,000 to 35,000 Missourians who can't buy insurance coverage because of high-risk health problems.

"This is not a poor-folks program," she said. "This is for people who have some income but they don't have access."

Smith said that those who qualify for the state's high-risk pool will pay premiums of not less than 150 percent or more than 200 percent of the normal rates.

Funding for the insurance pool will come from the premiums paid by those insured under the program and from assessments that will be paid by the more than 900 companies that write health insurance in Missouri, he said.

"It (the assessment) is according to market share," he said, with the company writing the most health coverage in this case, Blue Cross paying the largest assessment.

"Once you get below the top 25, the rest will be paying very nominal amounts," said Smith.

Lumpe said the high-risk pool is not a new concept nationally. Minnesota established the first program about 12 or 13 years ago. Since then, more than 20 states have established such pools, she said.

Smith said the assessments are paid only if the premiums don't cover all the money paid out in insurance claims. But, he said, traditionally such high-risk pools pay out more money for medical bills than they collect in premiums.

Last year the total assessment in Florida amounted to $45 million. The assessment in Wisconsin totaled $11 million, Smith said.

Wisconsin, he said, is similar in size to Missouri, with a population of slightly more than 5 million.

Missouri's insurance pool is under the control of a seven-member board of directors comprised largely of representatives of the major insurance companies in the state. But the plan of operation must be approved by the state's insurance director.

"We are in the process of deciding the benefits," said Smith. "We should have it ready by Nov. 1. We're moving rather rapidly with it. Hopefully, we will be accepting applications shortly thereafter."

About 155 letters from interested Missourians have already been received by state insurance officials.

Smith said he would encourage those who are interested in obtaining coverage from the insurance pool to notify the Missouri Division of Insurance in writing.

Smith said the insurance pool won't be a money-maker for the insurance industry. "We're not going to make any money in this thing."

But he said he believes the high-risk insurance pool is needed. "Frankly, it is an embarrassment to have people out there who can't have health insurance," said Smith.

He said Blue Cross itself insures "a lot of people in this state that other companies turn down, and that is why we are stepping in and playing a leadership role on this high-risk pool."