Sponsored By
An organization or individual has paid for the creation of this work but did not approve or review it.



Pawlenty opts state out of high-risk health pool

MINNEAPOLIS  — Minnesota is opting out of a new national high-risk pool for hard-to-insure people because the state already offers such a program and the federal plan might quickly run out of money, Gov. Tim Pawlenty said Friday.

Pawlenty also said in a letter to Health and Human Services Secretary Kathleen Sebelius and at the Republican state convention that he's concerned about federal "overreach."

Minnesota joins several other states, including Nevada and Georgia, that have opted out of the pool, which starts in July. Friday was the deadline for states to indicate if they were opting in or out.

In his letter to Sebelius, Pawlenty noted that Minnesota's high-risk pool, which started in 1976, is among the oldest in the nation. He cited a report by the chief actuary of the Centers for Medicare and Medicaid Services that by 2011 and 2012, the initial $5 billion in federal funding for the national high-risk pool would be exhausted, resulting in big premium increases to sustain the program.

"This identified risk suggests the potential for creating a program and financial obligations for our state that are simply unsustainable and otherwise unwise. Minnesota, along with most other states, is managing its budget through challenging fiscal times," Pawlenty wrote.


The pool is part of President Barack Obama's recently signed federal health care overhaul. It's a temporary program aimed at providing coverage for people with pre-existing conditions who otherwise would not get coverage. In 2014, denial of coverage for medical reasons will be against the law.

At the GOP state convention in Minneapolis, Pawlenty said Minnesota already has its own high-risk program.

"It works well, and we don't want to join that (federal program) because they're not funding it. We don't think it will be as good as Minnesota's, and plus we don't like the federal overreach on it," Pawlenty said.

U.S. Sen. Al Franken, D-Minn., said his office estimates Minnesota is eligible for up to $68 million in federal funds through the national high-risk pool, "but ultimately it's up to the state to decide whether they want to negotiate with HHS to get these funds."

His Democratic colleague, U.S. Sen. Amy Klobuchar, said she "worked hard to make sure Minnesota would be eligible for this funding and I will continue my efforts to push for our state's share of federal health care funding."

Sebelius has said she expects the national plan to operate alongside existing state risk pools. Thirty-four states already have such pools, said Lynn Blewett, an associate professor at the University of Minnesota and director of the State Health Access Data Assistance Center at the university.

Pawlenty's decision appears reasonable because there apparently isn't enough money to fund the national pool for more than a year, Blewett said. If the pool runs out of money, "then who's left holding the bag?" she asked.

Minnesota's pool also has no waiting period while the waiting period for the national pool is six months, Blewett said. About 27,000 Minnesota residents are covered by the state pool, which had total incurred claims of $245.7 million in 2008, she said.


"It's really hard to know" if the national plan would offer lower premiums than Minnesota's high-risk plan, Blewett said. For older people, she said, rates might have gone down while younger people may have paid a bit more because of the formula used to determine premiums.

She said even though premiums are capped and subsidized by health insurance plans, Minnesota's high-risk pool premiums are "still fairly high" — 125 percent of the average premium rate in the individual market. For someone opting for the $1,000 deductible plan, the monthly premium through July is $699 a month, she said.


Associated Press Writer Briana Bierschbach contributed to this report.

What To Read Next
Get Local