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Annette Stebbins
Annette Stebbins, an interior designer who has revamped much of The Gardens Independent Living complex in Madison, received insurance through the Wisconsin high risk program since a liver transplant in 1992.

For her 50th birthday Annette Stebbins received a liver. The transplant saved Stebbins' life. But her insurance provider refused to cover it, calling it "experimental." She was also unable to find affordable coverage afterward. "I was middle America who had faithfully paid her bills for years, and then got turned down," recalls Stebbins, a Madison designer and event planner.

Her solution: to sign up with Wisconsin's Health Insurance Risk-Sharing Plan, a high-risk pool set up for people like her locked out of the private insurance market because of pre-existing medical problems.

One of the few things that Republicans and Democrats could seem to agree on during the past year of bitter wrangling over our country's ailing health care system is that people like Stebbins deserve more help. And so one of the first actions taken by the Obama administration in implementing the new health care reform law last week was to allocate $5 billion to set up a high-risk pool at the national level to subsidize the cost of health insurance for people with medical problems.

That means that Wisconsin's high-risk pool, until recently an overlooked stepchild of the state's BadgerCare public health programs, is finally due for some attention and expansion of its own. The health care reform law requires the U.S. Department of Health and Human Services to set up the federal program by July, and most experts expect that the federal mandate in Wisconsin will be met by expanding the Health Insurance Risk-Sharing Plan. "We are here and ready to go," says Amie Goldman, CEO of the plan, which officials describe as a quasi-governmental authority, created by state statute and with a board appointed by the governor, but with no state funding.

The Government Accountability Office has estimated that there are 4 million uninsured Americans like Stebbins with health problems that could make them eligible for such a risk pool. The new national program is meant to be a temporary bridge until 2014, when insurance providers will be prohibited from discriminating against people with pre-existing conditions and such consumers will finally be able to purchase health policies at the same rates as others.

While 35 states already offer some variation of high-risk plans to those with medical problems, coverage is often expensive and limited. Some states have even closed the programs to new enrollees altogether. Wisconsin's existing high-risk pool program is the third-largest in the country, covering 17,000 state residents. The program has seen a dramatic rise in applications as people across the state have lost their jobs and health insurance. Finding a new health care policy after COBRA coverage runs out is often impossible for people with a history of medical problems, and often their only resort is to go without insurance or to apply to the high-risk insurance pool. Applications in March of this year were 45 percent higher than in March 2009.

Most members have one or more conditions that have led to them being rejected by insurers in the individual market or to being offered policies at unaffordable rates. An informal sample of hundreds of recent HIRSP applications found that the top 10 health problems listed by applicants included, in order of predominance, high blood pressure, obesity, high cholesterol, diabetes, cancer, heart problems, arthritis, sleep apnea, depression and tobacco use.

"Having had a heart attack, I was toxic," recalls John Lehman, 63, a retired software engineer who lives in Milwaukee and is on HIRSP's Consumer Advisory Committee. "I couldn't get insurance at any price." Luckily, a neighbor told him about the state's high-risk pool. Lehman, Goldman and other advocates for the program concede that it has been difficult to get word out to the public that it even exists.

But then Lehman slammed into a Catch-22. To qualify for the state program, he needed to turn in two letters of rejection from private insurance companies. But brokers from those companies refused to even send him an application when he described his health history. "So I learned to fib," Lehman sighs. "It was Kafkaesque." He did not disclose his complete health history over the phone, but then filled out the applications accurately. Once he received his two letters of rejection from insurance providers, it was "astoundingly easy," he recalls, to fill out the paperwork and qualify for the state's program. Since then, he says, "I haven't had one hassle."

Except for the cost of coverage. Lehman, who says his health has been fine since his 2001 heart attack, pays $656 a month for a HIRSP policy with a $2,500 deductible.

A study conducted by the Henry J. Kaiser Family Foundation found that coverage for plans offered by the 35 states with such high-risk pools typically costs 25 to 100 percent more than the standard market rate for health insurance.

Even with high rates, though, none of the programs offered across the country can pay for themselves through premiums alone, primarily because they serve a high health-risk population that requires more medical care than most. In 2008, more than $2.01 billion was spent on 199,020 high-risk pool enrollees nationwide, according to the Kaiser study. The average claim cost per enrollee was $9,437.

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In Wisconsin, premiums fund about 60 percent of the program's operating costs. A significant portion of the rest is financed by health insurance providers, who pay an assessment on policies sold in the state, which generated $27.5 million last year, or about 18 percent of HIRSP's $155 million operating budget, according to Goldman. The rest is funded through discounts offered by health care providers.

HIRSP officials have made what most observers agree is a valiant effort to lower costs for members and improve benefits over the past few years with some success. Rates for several of the plans have dropped recently. At the same time, the program has doubled the lifetime limit to $2 million, Goldman says. Federal help would mean the program could improve benefits and affordability even more, she says.

It might also allow the state to get rid of an unpopular requirement among members: a six-month waiting period before coverage of pre-existing conditions can kick in. According to the Kaiser study, 30 of the 35 states with high-risk pools have similar requirements, which have long troubled consumer advocates because too many people with chronic conditions then end up going without needed care.

Wisconsin's rates are among the most affordable in the country. The GAO study compared information about each state's most popular plan. In 2008, average premiums for Wisconsin's most popular plan, the $2,500 deductible policy used by Lehman and nearly half of HIRSP's other members, were the fourth-lowest in the country.

Yet the premiums are still out of reach for many. Wisconsin is one of the 15 states or so that offers subsidies to those with low incomes - nearly a quarter of members receive such subsidies. But state officials concede that many more state residents have probably been scared away from even applying by the high premiums, and could use more help.

Federal dollars may allow Wisconsin to give it to them. One state analysis estimated that up to 40,000 additional state residents, currently uninsured, could benefit from such a pool if it was made more affordable. State officials don't know exactly what share of the $5 billion in federal funds Wisconsin might qualify for, but they are still excited about the potential for HIRSP to expand.

And that makes advocates for consumer health happy. "It will make a decent program even better and more affordable," says Bobby Peterson, a public interest attorney and director of ABC for Health.

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