Health Reform for Pre-existing Conditions starts in June, Limits Out of Pocket Costs to $5950 a year.

NY Times:

Federal health officials said the program would be available from late June of this year to Jan. 1, 2014.

Ms. Sebelius can sign contracts with states to operate insurance pools meeting federal standards. The federal government can operate the pool directly or hire a nonprofit organization to run it in any state that does not want to do so.

To qualify for the high-risk pool, a consumer must have a pre-existing condition and must have been uninsured for the six months before filing an application.

Premiums in the new program will be set at “standard rates,” based on the average premiums charged by private insurers for similar coverage in the individual market. “If I have cancer, my rate cannot vary based on my having cancer,” said the director of the Office of Health Reform at the Department of Health and Human Services.

Ms. Sebelius may establish a minimum set of benefits. The law specifies a limit on out-of-pocket medical costs, which cannot exceed $5,950 a year for an individual in the pool.

The law provides $5 billion to help pay claims for people in the risk pool.

A recent study published by the Kaiser Family Foundation says that 35 states have high-risk pools with enrollment that totaled 200,000 at the end of 2008. States with the largest enrollment include Wisconsin, Illinois, Maryland, Minnesota, Oregon and Texas.

State high-risk pools is an indirect subsidy to insurers who then don't have to reduce their profit margins, but instead leave it up to taxpayers. This is a major component of Rep. Paul Ryan's plan, and another reason his "Road Map for a Dickensian future" is so wrong for Americans. These pools lose money. Someone should ask Ryan how he intends to pay for them.

State high-risk pools, all of which operate at a loss, paid a total of $1.9 billion in claims in 2008, according to a recent report by the Government Accountability Office, an investigative arm of Congress. The average claims per person totaled $9,437 in that year. (Remember, reform will pay $6,000)

The formula goes something like this:

Premiums paid by beneficiaries accounted for 54 percent of the money used to operate the existing high-risk pools. Assessments collected from insurance companies accounted for 23 percent of the total, while state general revenues and other taxes accounted for most of the remainder.