Politics are on full display in states’ decisions to set up required high-risk pools or let the federal government run a program for them. The District of Columbia and 29 other states have told the Department of Health and Human Services that they will set up their own health insurance programs. Another 18 states have declined. Two states, Florida and Arizona – the usual retarded stepchildren — haven’t even formally responded yet.

While Florida and Arizona pick the fuzz out of their belly buttons, the rest of the states have pretty much followed party lines. Republican governors have refused the high-risk pool challenge, while Democratic governors have stepped up to the plate. Regardless of their decisions, governors’ unanimous concern has been what happens if the $5 billion allocated for the program runs out prior to 2014, when insurers must accept all applicants.

HHS so far has no answer to that question, and the Centers for Medicare and Medicaid completed a disturbing analysis: CMS expects the $5 billion to be exhausted by 2011 or 2012. That’s not surprising. As we’ve covered before, only those with the most expensive conditions will purchase these plans because of their high price tag. These plans violate the very tenet of insurance, to spread risk throughout a population. So funds quickly evaporate.

Ironically, the abstaining Republican states may be better off. Why? The healthcare reform legislation isn’t especially clear on how to run a risk pool program, and implementation legislation has yet to be completed. That leaves states to develop 29 different interpretations of a high-risk pool health plan. It won’t be pretty. Meanwhile the federal government will create a standardized plan to cover the remaining 18 states, meaning true portability and peace of mind for folks moving among those states.

Where does your state stand on high-risk pools? Find out here.

Photo Credit: mcescobar1

© 2010 Actively Fused LLC