The Boston Globe reports that “[t]housands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage“:

In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan. Their medical spending while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion, according to data the state’s largest private insurer provided the Globe.

The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month. The previous year, the company’s data show it had even more high-spending, short-term members. Over those two years, the figures suggest the price tag ran into the millions.

This is precisely what keeps insurers up at night — the fear that an inadequate individual health insurance mandate would allow some people to game the system and purchase coverage only when they need it. This creates a death spiral by which healthy people jump in and out of coverage, leaving insurance pools populated with costly sick people. Austin Frakt argues that Massachusetts can fix this problem by establishing an open enrollment period and allowing insurers to exclude coverage for preexisting conditions for six months, something Massachusetts Governor Deval Patrick has already proposed.

Critics will undoubtedly argue that the Massachusetts experience could doom the success of the national mandate. And while there is some question about whether or not the penalties for not buying coverage are high enough to detract free riders, I suspect the success of the mandate will also heavily depend on the public education campaign promoting coverage and the simplicity of the actual enrollment process.

Fortunately, Families USA’s Ron Pollack is all over it. Along with America’s Health Insurance Plans (AHIP), and several other industry partners, Pollack is heading up a 50-state health care reform implementation effort called Enroll America to encourage everyone to sign up for coverage. The campaign will pay particular attention to the 5% of Americans who are eligible for coverage but are not expected to enroll and “will work to create an easy application process for benefits, including access to enrollment at doctors’ offices, pharmacies and government agencies that provide other benefits like food stamps.”

All this is a good start to enticing individuals who don’t think they need coverage to sign up for insurance. Still, lawmakers will undoubtedly have to make their share of changes to the health law (just like Patrick is doing now) to ensure that coverage is both affordable and accessible.

Most Americans who lose their jobs and the health insurance coverage that comes with it have the option of maintaining their insurance at the community-rated premium through the COBRA program. COBRA provides coverage to “certain former employees, retirees, spouses, former spouses, and dependent children” at fairly steep rates (enrollees have to pay the full cost of insurance plus an administrative fee), but it can insulate a family from medical debt and financial ruin.

But not all Americans can access this health care security. The federal government requires companies to offer COBRA coverage to married spouses, but does not mandate companies to extend the same option to the domestic partners of departing employees. As Liz Weiss and Josh Rosenthal point out in this column, some in Congress are seeking to change that:

A new bill introduced last month in Congress would rectify this longstanding inequity in the COBRA system by expanding federal COBRA health care continuation guarantees beyond only opposite-sex, married couples. The Equal Access to COBRA Act of 2010, introduced by Sen. Barbara Boxer (D-CA), would guarantee same-sex spouses, domestic partners, and other beneficiaries such as parents, grandparents, or siblings the opportunity to maintain their employer-provided health insurance plan through COBRA. The bill would not require employers to offer health insurance to families or any relatives. It would merely offer all covered family members the same opportunity to maintain health care coverage.

“Nontraditional families, including domestic partnerships, same-sex marriages, and multigenerational families are increasingly common” and Boxer’s legislation “would allow equal access to COBRA coverage for all individuals who are covered by an employer’s health plan.” The legislation could benefit some “6.6 million opposite-sex unmarried partners, nearly 800,000 same-sex couples, and 16 percent of Americans living in a multigenerational household, according to new research from the Pew Research Center.”

The bill is currently in the Senate Committee on Health, Education, Labor, and Pensions (HELP) and has not attracted any co-sponsors.

One of the first provisions to take effect from the new health care reform law is a temporary insurance program that will provide coverage to Americans who can’t find affordable insurance in the individual health care market because they suffer from a pre-existing condition. On Friday, Health and Human Services Secretary Kathleen Sebelius kicked off the implementation process by officially asking states to decide whether they will participate in a new high-risk health-insurance pool, build on an existing program (if they have one), establish a separate state-based high risk pool with federal funding or do nothing at all, in which case the federal government would come in and administer the program.

At least 35 states are already operating their own high-risk pools but beginning in June, states that choose to build off their existing programs will have to meet new federal requirements. High-risk insurance pools will not be able to impose preexisting condition exclusions, will have to keep their premiums at “standard rates” (or no higher than the average person of that age would pay for insurance in the private market), limit on out-of-pocket medical costs to $5,950 a year for an individual, and insurers will have to maintain an actuarial value of at least 65%. Issuers will also be prohibited from varying premiums on the basis of age by a factor greater than 4 to 1.

Eligible individuals will be be able to enroll in the new high-risk insurance pools until 2014, at which point they will transition to a new insurance policy within the exchange. Here are the eligibility requirements:

– Have to be a citizen or national of the United States or lawfully present in the United States;

– Not have been covered under creditable coverage for the previous 6 months before applying for coverage; and

– Have a pre-existing condition, as determined in a manner consistent with guidance issued by the Secretary.

HHS has yet to issue its guidelines, but several health care wonks I spoke to are already raising concerns about the feasibility of providing coverage to the millions of Americans with pre-existing conditions on a budget of $5 billion. Some worry the program will be underfunded, others contend that the department will not be able to implement the new initiative in just 90 days and many question the wisdom of relying on a concept that has not had much success on the state level. That last criticism may be less than timely, but it’s not without merit.

Because of the higher health care costs typically incurred by the sicker individuals who enroll in high-risk insurance pools, all existing programs operate at a loss and have to “supplement their revenues through various funding mechanisms, such as assessments on health insurance carriers and state general revenues.” A Government Accountability survey of the existing 35 risk pools found that in 2008, the combined enrollment in all state high-risk pools was approximately 200,000 people, or only about two percent of total individual market enrollment in those states. All states require their high-risk pool to be a coverage-of-last-resort and typically impose waiting periods for coverage of preexisting conditions to discourage medically uninsurable individuals from foregoing health insurance until they require care.”

High-risk insurance pools charge premiums that are “higher than for plans offered to healthy individuals in the private health insurance market,” and impose deductibles that are “almost three times as high as the average annual deductible of $560 among employer-sponsored health insurance plans.” Today in most state pools, it would cost a 50-year-old more than $7,000 per year to enroll in single coverage with a $1,000 deductible.

The new health reform law was designed to lower the cost of coverage and eliminate the price-out effect of the existing programs. (One study estimated only eight percent of the target uninsurable population is able to enroll in state high-risk pools, due primarily to high premiums.) But as this brief from Kaiser Family Foundation points out, attempts to expand the program to include more individuals may be stymied by the relatively low funding levels:

Congressional health reform bills would establish a National High-Risk Pool Trust Fund and appropriate $5 billion to support the program over the duration of the reform implementation period. Over the reform implementation period, this would mean an average of $1.25 to $1.67 billion in program funding would be available per year. By contrast, in 2008, states with high-risk pools collectively spent roughly $900 million to subsidize excess losses for some 200,000 enrollees. Taking into account health care inflation and the cost of other changes state pools would need to adopt to meet federal standards, it is doubtful that federal funding provided under health reform bills would support substantial pool enrollment growth.

The brief has some suggestions for how policymakers can stretch the existing dollars — the law does say that if funding is not sufficient to support a national pool throughout the transition period, HHS can make adjustments, including suspension of new enrollment, premium increases, or reductions in covered benefits — but I suspect that if the administration hopes to make high-risk insurance pools a case study in health care reform success, it may have to find a way to increase funding and possibly subsidize coverage for lower-income Americans.

The federal health care law prohibits public dollars from being used to finance abortions and requires insurers that choose to offer abortion coverage to collect a separate check from policy holders, but the law also gives states the option of reasserts states’ right to ban private insurers from providing abortion coverage to women within the exchange.

Tennessee is at least the second state to take advantage of this provision, advancing legislation that would eliminate abortion coverage from an exchange that does not even go into effect until 2014. The Tennessee House Commerce Committee passed the bill (HB 2681) on a voice vote last week. From the text:

No health care plan required to be established in this state through an exchange pursuant to federal health care reform legislation enacted by the 111th Congress shall offer coverage for abortion services. For purposes of this section, “abortion” has the same meaning as defined in § 39-15-201.

Tennessee already has restrictive abortion laws. Public funding is available for abortion only in cases of life endangerment, rape or incest and minors must obtain parental consent before receiving an abortion. Last week, the Tennessee legislature also approved two separate measures requiring “abortion clinics to post signs alerting women of a Tennessee law that prohibits coercing a woman into having an abortion.”

A Missouri Senate committee also approved a bill that would deny insurers the right to offer abortion coverage in any government exchange last month.