Risky business: Michigan introduces high-risk insurance plans

Amy Higgins

In 2014, health insurance companies will be required to insure everyone, regardless of health and preexisting conditions. Until then, the states are setting up high-risk pools (or expanding existing ones) to cover those whose preexisting conditions leave them unable to get health insurance.

Even though the high-risk pools are available, enrollment has been lower than expected. Michigan's high-risk program, the Health Insurance Program for Michigan (HIP Michigan), is trying to draw in more enrollees with two new plans that it hopes will appeal to a wider variety of residents and budgets.

Michigan's new plans

These new high-risk plans, available as of May 1, 2011, have lower premiums but higher deductibles. The original plan came with a deductible of $1,000, while the new plans have $2,500 and $3,500 deductibles.

Premiums vary by age, according to HIP Michigan's website. For instance, a HIP Michigan member between 50 and 54 years old will pay a $447 monthly premium for a $1,000 deductible, $322 for a $2,500 deductible and $270 for a $3,500 deductible.

Michigan residents are eligible for HIP Michigan coverage if they've been without health insurance for six months. They also must present proof that they have been denied health insurance within the past six months or have been offered coverage that excludes certain conditions.

HIP Michigan benefits include:

  • Prescription drug coverage.
  • Office visits.
  • Emergency services.
  • Inpatient and outpatient hospital services.
  • Maternity coverage.
  • Diabetes treatment, equipment and supplies.
  • Home health care, skilled nursing and hospice care.
  • Outpatient rehabilitation.
  • Preventive care and screening.
  • Behavioral health services.

HIP Michigan policyholders must pay a $20 co-pay for a primary care doctor's office visit, $30 for a specialist and $100 for an emergency room visit. For prescriptions, they must pay a $10 co-pay for generic drugs and $30 to $50 for brand-name drugs.

According to HIP Michigan, there are roughly 1.2 million uninsured Michigan residents, but it's not known how many of them have pre-existing conditions that have excluded them from coverage.

HIP Michigan is a temporary program that will operate until Jan. 1, 2014, when the nationwide health care mandate goes into effect and the state insurance exchanges are up and running. Subscriber premiums and federal financial backing of about $141 million finance the HIP Michigan program, according to the National Conference of State Legislatures (NCSL).

More about the high-risk pools

HIP Michigan is part of a temporary nationwide high-risk insurance program called the Pre-existing Condition Insurance Plan (PCIP). The program is federally funded (with $5 billion), but each state is allowed to operate its own high-risk pool, according to the U.S. Department of Health and Human Services (HHS).

Twenty-two states and the District of Columbia deferred to HHS to run their pre-existing condition insurance programs, according to NCSL. These states opted out of running their own programs because they were worried that they would not be able to meet the demand for coverage with limited federal funding, Kaiser Health News reported in August 2010.

Many Americans with pre-existing conditions can benefit from their states' high-risk pool programs. as they can receive the treatments, medications and screenings they postponed while without health insurance. But some still just might not be able afford to pay hundreds of dollars a month for insurance. According to Kaiser Health News, cost, eligibility requirements and states' limited time for publicizing plans are likely factors in an overall low number of applications.