Kentucky Offers New HIP

Published July 1, 2001

Kentucky Access, the state’s new high-risk health insurance pool, has enrolled 164 Bluegrass State residents who previously were unable to afford or obtain health insurance, typically due to a pre-existing condition.

The program, which went into effect in January, is “on target” and currently has 300 pending applications. State officials say all are “likely to be approved.”

According to a news report in Health Policy As It Happens, Janie Miller, the state’s Insurance Commissioner, does not expect to see dramatic increases in the HIP’s enrollment until October or November, when private health plans typically enter their renewal period. About 1,200 are expected to enroll by the end of the year, with up to 5,000 expected in future years.

The state is marketing the program in Kentucky Living, a local magazine reaching 400,000 homes every month. In addition, an aggressive advertising effort includes information posted at pharmacies and attached to prescription bags. According to Miller, the state is offering insurance agents and brokers a $50 referral fee for each individual who successfully joins the program.

Kentucky Access is a cooperative effort between state government and private-sector insurance, an arrangement currently available in 28 states. The program represents a partial solution to years of failed state government-run health care plans in Kentucky. The state’s single-payer plan eventually drove out competition, leaving just two insurers serving the Kentucky market. Insurance premiums increased dramatically, contributing to the growing uninsured rate in the state.

By enrolling Kentuckians with known, high-risk medical conditions in a separate insurance pool, the state hopes to encourage private insurance companies to return to the state marketplace.

Colorado Has New HIP Funding

CoverColorado gained an added measure of stability with new legislation signed on May 5 by Gov. Bill Owens (R). The measure provides more reliable funding for the state’s high-risk health insurance pool, implementing a broad-based insurance industry assessment instead of relying solely on general revenue appropriations to cover plan claims and administrative costs.

The law also makes several improvements to CoverColorado benefits: It increases the maximum benefit coverage under the program from $500,000 to $1 million, comparable to programs in most other states; allows for coverage of dependents of eligible individuals; and makes the risk pool the state’s alternative for access guarantees in the individual market under HIPAA, the federal health insurance portability law.

Twenty-eight states now operate risk pools that offer comprehensive insurance for people who typically have been denied private insurance due to a preexisting condition or chronic illness. People enrolled in the programs pay a premium somewhat higher than what is standard in the state’s insurance market, but the premium is capped by law at a specified percentage above standard.

Subsidies are inherent in the nature of high-risk pools, as insurance premiums cannot be set sufficiently high to cover all the program costs. In 25 of the 28 states with HIPs, assessments on the insurance industry are the principal mechanism for funding the subsidy, often with some level of tax support by the state.

High-risk pools not only serve people with a proven need for insurance protection, but also help shield insurance companies from the expense of insuring persons with predictable, high-cost medical needs. HIPs accomplish the social goal of assuring access to quality medical care for those who need it, without the disruptions and negative side effects caused by regulation of the insurance industry.

For more information . . .

See “Extending Affordable Health Insurance to the Uninsured,” Heartland Policy Study No. 91, issued in August 1999 and available on the Internet at

Breaking health care news can be found on the Health Policy as it Happens Web site at