Highmark halting special coverage

'Guaranteed-issue' plans discontinued at end of '13

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Highmark Inc. is discontinuing all of its individual "guaranteed-issue" health insurance plans at the end of this year, affecting about 25,000 policyholders in Western Pennsylvania and 13,000 more in the central part of the state.

Those customers, if they intend to maintain health coverage, can buy an individual plan through the Pittsburgh insurer, through another insurance carrier or through the new online health insurance exchanges set to open Oct. 1.

"Guaranteed-issue" policies are a special class of coverage offered by Highmark and other Blue Cross Blue Shield insurers, available to everybody regardless of health history.

The premiums can be expensive, but they also are subsidized. The plans generally are money-losers for the insurer.

In Pennsylvania, the Blue Cross Blue Shield insurers are insurers of last resort. They have been the only insurers to offer individual, non-employer-based coverage to those with prior health conditions, without any "medical underwriting" -- that is, without the use of personal health information to evaluate an applicant for overall health risks and insurability.

The policies are being dumped because of the 2010 Affordable Care Act, which forbids insurers from denying coverage to an individual because of health history.

"The entire industry is moving toward a market on Jan. 1, 2014, where all products have no medical underwriting," said Highmark spokeswoman Kristin Ash. "Essentially, all new individual products are 'guaranteed issue,' because no insurer is allowed to medically underwrite after Dec. 31."

As a result, the existing guaranteed-issue plans will be eliminated.

Guaranteed-issue plans were once the only option for people in Pennsylvania who had pre-existing health problems and didn't have government or employer-based health coverage. But, with the implementation of the Affordable Care Act, that began to change.

First, the ACA provided funding for the states -- Pennsylvania included -- to set up "high-risk" health insurance plans for uninsurable populations. Pennsylvania's plan is called PA Fair Care, and at its peak it enrolled about 6,900 Pennsylvanians.

The "high-risk" plans were meant to act as a bridge between the 2010 passage of the law and 2014, when the ACA would essentially outlaw medical underwriting by insurers.

Prior to the passage of the ACA, Pennsylvania was one of a minority of states that required guaranteed-issue plans to be offered to all who were willing and able to pay the premiums. In Maine, Massachusetts, New Jersey, New York and Vermont, all insurers selling individual policies are required to sell guaranteed products, too, and Washington state requires guaranteed-issue plans for those in the poorest of health.

In Pennsylvania, Michigan, Rhode Island, Virginia, and Washington, D.C., the Blue Cross Blue Shield carriers have been appointed the insurers of last resort, meaning the Blues -- but not other insurers selling individual policies -- must sell plans to all who will buy them.

Highmark notified its guaranteed-issue policyholders that their plans would be dropped via letters that went out earlier this month.

The affected plans in Western Pennsylvania are: Special Care for low-income populations (14,309 policies); Keystone Blue for Kids HMO (585), Keystone Blue GI (10), Classic Blue (878), Preferred Blue PPO (5,507), PPO Blue high deductible health plan (1,017), Keystone Blue Conversion (763), and HHIC Transition PPO (1,807).

In Central Pennsylvania, the discontinued policies are: Special Care (5,465), Classic Blue Traditional (83), Classic Blue Comprehensive (5,832), PPO Blue high deductible health plan (1,057), and HHIC Transition PPO (548).


Bill Toland: btoland@post-gazette.com or 412-263-2625.


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