Fifteen governors have reportedly informed the federal government they will not take part in managing high-risk health insurance pools in their states. Expected to open within 90 days, the pools are part of the new healthcare reform law, which has allotted $5 billion for them.
Under the Patient Protection and Affordable Care Act of 2010, the high-risk health insurance pools are to provide temporary insurance until 2014 for individuals denied coverage due to pre-existing conditions. The law allows state governments to run them or opt out of the program, allowing the federal government to administer them.
Thirty-five states have existing high-risk pools; the new law would keep those in place and allow the states to enhance them.
Idaho Gov. Butch Otter notified Health and Human Services Secretary Kathleen Sebelius last week that his state would not be implementing the pool.
A statement from Otter's office said Idaho is among 15 states, including Wyoming and Nevada, that have officially opted out of the federal high-risk pool program. Otter's office said Utah Gov. Gary Herbert has "expressed some concerns" as well.
"Put simply, Idaho cannot afford to subsidize a second high-risk pool program, especially during these difficult economic times," Otter's letter read.
Idaho's AARP chapter said Otter's move "is not an opt out, but a cop out."
"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," Idaho AARP officials said. "The cost of the high-risk pool will be covered, 100 percent, by the federal government – coming at a time when Idaho can use the help."
According to the Idaho AARP, 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 Idaho residents with pre-existing conditions aren't priced out of the market.
Idaho AARP leaders said they are planning to launch a statewide campaign to dispel what they call incorrect "rhetoric, divisiveness and scare tactics" on healthcare reform coming from the governor's office.
Nevada Gov. Jim Gibbons said he based his decision to opt out on counsel from state stakeholders and experts.
"Nevada does not currently operate an insurance high risk pool and we believe the funding provided for this component is grossly inadequate," he told Sebelius in an April 28 letter.
In Wyoming, Gov. Dave Freudenthal has also opted out.
"(T)he state's involvement would be an unnecessary addition to the process that would result in redundant administrative costs and unnecessary delays in the implementation process," he wrote Sebelius.
This isn't the only time these three states – all run by Republican governors – have opposed the healthcare reform law. Under leadership from the American Legislative Exchange Council (ALEC), they're part of more than 35 states that are considering legislation to oppose the healthcare reform law. In addition, some states have threatened to sue the federal government over its constitutionality.