Politico: Texas lawmakers weigh reopening high-risk pool

AUSTIN, Texas — Republican state lawmakers, closely tracking Obamacare repeal efforts in Washington, may look to reopen the state's shuttered high-risk pool to insure Texans who can't get coverage elsewhere.

Bills in the Texas House and Senate would allow the state insurance commissioner to set up a temporary high-risk pool if federal funds become available.

Both bills, which have passed out of committee, leave open whether the pool would be a separate program for the sickest Texans — similar to the previous high-risk pool — or a reinsurance-like scheme that would backstop insurers' claims in the individual market. The stalled Obamacare repeal bill in Washington would encourage states to set up either mechanism.

In Texas, the high-risk pool bills prohibit using the funds to expand the state's Medicaid program and rely mostly on potential federal funding to operate.

"Texas has been very straightforward about" wanting to repeal Obamacare, said state Rep. Larry Phillips, who authored the House bill on high-risk pools.

State Sen. Kelly Hancock, who authored the Senate version, said that his bill "would put a plan in place so Texas is prepared for whatever comes out of D.C."

But critics of high-risk pools say they wouldn't be an adequate substitute for people who might lose coverage under repeal of the Affordable Care Act.

A high-risk pool that operated in Texas before Obamacare, similar to pools elsewhere, had a troubled history. It covered a fraction of uninsured Texans at rates more than double regular market coverage.

"It was grossly inadequate to take care of the needs of people in the state," Texas Rep. Lloyd Doggett told POLITICO about the previous high-risk pool. Doggett was in Austin with Minority Leader Nancy Pelosi to tout Obamacare on Thursday.

Texas' former high-risk pool, which opened in 1998 and was dissolved in 2014 when the ACA took effect, covered 30,000 Texans out of 6 million uninsured at the time.

Phillips defended the state's previous high-risk pool, saying the state was starting to bring down premiums before it closed. In 2014, the pool collected more in revenue than it paid out in claims.

"I think it was probably in its best shape when the Affordable Care Act came," Phillips said. "We were getting towards that — to get those premiums down, to try to make it work."

Stacey Pogue of the left-leaning Center for Public Policy Priorities said that deductibles in the high-risk pool climbed to $10,000 a year and enrollees dropped out as costs grew. Even with subsidies, which were later added, many low-income Texans couldn't afford the cost of coverage, she said.

Pogue said a reinsurance-like plan might make sense, depending on the details. However, setting up a separate high-risk pool is a "terrible idea," she said.

"Old high-risk pools are a relic of an era when insurers could deny coverage to people with pre-existing conditions," she said.