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Health plans for top risks shaky at first

One of the first parts of the new health care law ready for consumers -- special health plans devoted to the insurance industry's rejects -- is attracting only a fraction of the predicted customers, prompting the Obama administration and states to step up their strategies to motivate people to buy them.

At the same time, since the plans opened for business in the late summer and early fall, the medical bills so far are, in at least a few states, much higher than anticipated, raising the question of whether $5 billion that Congress has devoted to the program could run out even if relatively few people join.

Federal health officials contend that the plans, known as high-risk pools, are experiencing expected growing pains. It will take time to spread the word that they exist and to adjust prices and benefits so the plans are as attractive as possible, they say.

State-level directors of the plans agree, in part. But in interviews, they also said that the insurance premiums are unaffordable for some who need the coverage -- and that some would-be customers are skittish about the plans' stability as federal lawsuits and congressional Republicans are trying to overturn the entire law. The Pre-Existing Condition Insurance Plan, the program's official name, is an early test of President Obama's argument that the members of the public will embrace the politically divisive law once they see its advantages firsthand.

According to some health policy researchers, the success or failure of the pools also could foreshadow the complexities of making broader changes in health insurance by 2014, when states are to open new marketplaces -- or exchanges -- for Americans to buy coverage individually or in small groups.

Under the sprawling health care legislation that Democrats pushed through Congress in March, the special plans were designed as a temporary coping mechanism for a small but important niche among the nation's 50 million uninsured: people who have been rejected by insurance companies because they already are sick.

Twenty-seven states have created their own high-risk pools. The rest used an option in the law to let their residents buy coverage through a new federal health plan.

Last spring, the Medicare program's chief actuary predicted that 375,000 people would sign up by the end of 2010. In early November, the Department of Health and Human Services reported that just 8,000 people had enrolled. HHS officials refused to provide an update, although they collect such figures monthly, because they have decided to report them on a quarterly basis.

"Like the rest of the country, we thought we'd have pretty much a stampede. That obviously hasn't materialized," said Michael Keough, executive director of North Carolina's plan. With nearly 700 participants, it is among the nation's largest so far, but it has one-third of the people expected by now.

According to interviews with administrators of nine of the state-run plans, only Colorado's is close to its forecast enrollment. Maryland has 97 participants, compared with 1,900 in an older state high-risk pool, according to Kent McKinney, who directs both. HHS' November report said that Virginia had 75 participants in the federal plan and that the District of Columbia had none.

So far, the plans have been both a boon and a heartbreak.

"I don't mean to be gushy about it, but they potentially saved my life," said Maureen Murray, 50, of Arlington County, Va., who had dropped her individual insurance policy in July 2009, after her work as a freelance video producer dried up. Murray was getting ready for a gym class in October when she "felt something go down my left side." It was a stroke. She was still in Alexandria's Mount Vernon Hospital when a CT scan detected an aneurysm on the left side of her brain. She was discharged two days before Halloween with a $25,000 hospital bill.

A friend recommended the new high-risk pool. Four days after Thanksgiving, she was approved. It will cover her surgery in January to repair her aneurysm. The premiums, she said, are steep -- $358 a month even after a rate reduction in January. "I'm in rough financial position, but I can get another job," Murray said. Without that insurance, "I might not have [had] that opportunity."

On the other hand, Will Wilson, 57, of Chicago, said he is "really, really, really, really discouraged." After he was diagnosed with AIDS in 2002, he discovered that his insurance at the time paid only $1,500 for medicine each year. His AIDS drugs cost $3,000 a month. Paying for the rest, he ended up in bankruptcy. Now, Wilson, a tourist trolley guide, gets help from the federal AIDS Drug Assistance Program.

But with no coverage for other kinds of care, Wilson remembers tears streaming down his face in February 2009, the night that he watched Obama vow to Congress, "Health care reform cannot wait, it must not wait, and it will not wait another year!"

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