July 1, 2004

New law aims to help insure high-risk people

CHARLESTON (AP) -- A law aimed at providing health insurance for people who have existing medical conditions is one of several to go into effect Thursday, the beginning of the state fiscal year.

Although the law will be in effect, the new plan will not be operational until about Jan. 1, said Bill Kenny, deputy insurance commissioner.

Gov. Bob Wise has not named members of a seven-person board that will oversee the West Virginia Health Plan. Insurance Commissioner Jane Cline will be chairman of the board and an ex-officio member. Other members will represent the insurance industry, medical providers and people eligible for the plan, Kenny said.

The board will set policies, benefit levels and premiums.

The program will be available only to people who cannot get health insurance in the commercial market because of an existing medical condition, such as diabetes, heart disease or a developmental issue. About 1,000 people, considered ''high risk,'' will be able to benefit from the plan, Kenny said.

The program's startup costs are being funded in part by a $500,000 federal grant from the Centers for Medicare & Medicaid Services. Otherwise no tax money will be involved in operating it.

Ongoing costs will be paid by premiums from people who are covered by the plan and an increase in fees hospitals pay to the West Virginia Health Care Authority.

Premiums by law will be between 125 percent and 150 percent of the prevailing market for an individual with no health problems, Kenny said. Although the board will set the premium, it will probably be about $600 a month.

''Health coverage is not cheap. Those of us who have group health plans that are subsidized by our employers don't know what a benefit that is until you go out shopping for yourself,'' Kenny said.

The Health Care Authority will provide $1.4 million a year for the plan by raising the fee it charges hospitals from 0.1 percent of gross patient revenue to 0.125 percent, said Chairwoman Sonia Chambers. The existing fee funds the authority, which regulates hospitals.

The state is asking hospitals to partially fund the plan because they will be among the beneficiaries, Chambers said.

''They are treating these patients anyway. They usually don't get paid anything,'' Chambers said. ''By helping capitalize this fund they will then be seeing patients who have insurance. I believe the hospitals will more than get their investment back.''

The board will hire a staff, probably only a few people, Kenny said. The first board meeting will be in July.

Many other states have similar programs, Kenny said. Their experience is that most people use the program for about two years then find other insurance.

''It's a good stopgap. It covers those people who can afford it and want to be insured but just are not eligible for any of the plans,'' Kenny said. ''It's truly a niche, but it's a niche that needs to be filled.''

Other laws taking effect Thursday include a provision expanding a research and development tax credit for businesses that invest in smaller, unprofitable technology companies.