WASHINGTON (Reuters) - When James Howard was diagnosed with brain cancer in March he did not know how he would pay for radiation treatments costing $87,000 and $2,300 a week for chemotherapy.
At the time of his diagnosis, Howard was insured by UnitedHealth Group Inc, a policy for which he paid because his employer, Hennessey Performance near Houston, Texas, did not provide healthcare insurance for its employees.
After his diagnosis, UnitedHealth revoked Howard's policy on the grounds that his was a pre-existing condition. A Texas high-risk insurance pool would have paid for his treatments, but only after a year.
Howard, a 28-year-old auto salesman, feared that his prognosis of just over a year to live might be cut short.
"Man, I felt like I was done," said Howard. "There was my death sentence right there."
Then he learned that he was eligible for another high-risk insurance pool created by healthcare reforms passed earlier y this year specifically for people with pre-existing conditions. He applied for enrollment in July when it opened.
In August, coverage began for Howard and hundreds of other Americans with diabetes, HIV and other conditions often deemed too costly to insure.
"I've been to the doctors. I'm on my radiation treatments. I'm getting my pills in the mail," Howard said. "Everybody's talked negatively about the Obama reform plan and all that stuff. There's more to it than that."
The $5 billion high-risk pool program, which the Department of Health and Human Services (HHS) has said could cover 200,000 people each year until 2014, is an early test case for the healthcare law. Experts have said it will take months before the pools reach capacity.
SUBSIDIZED COVERAGE UNTIL 2014
Cases like Howard's could serve to highlight benefits of the controversial healthcare reform as President Barack Obama and other Democrats address it as a campaign issue in the run-up to the November midterm elections.
Republicans have cited cost estimates that predict the program will run out of money or be forced to cut benefits or turn people away in the next couple of years.
"We support the creation of high-risk pools for those who have difficulty obtaining health insurance and are thus deeply concerned that these pools may not provide quality coverage or will limit enrollment," Republican Representatives Joe Barton and John Shimkus wrote in a July letter to HHS Secretary Kathleen Sebelius.
The federally funded risk pools are open to American citizens or legal residents who have been denied coverage and have been uninsured for six months. They offer subsidized coverage until 2014, when the broader state-run insurance exchanges are due to go into effect and insurance companies can no longer deny coverage to people with pre-existing conditions.
In states that opted to allow the federal government to run the risk pools, coverage started in August. Most of the pools are expected to be in effect by September, according to the government website, healthcare.gov.
One of the earliest states to set up a new pool was New Hampshire, where Gail O'Brien, 52, was diagnosed with lymphoma in February. The uninsured school teacher faced using her retirement savings to pay for treatment.
After passage of healthcare reforms, O'Brien decided to wait for the high-risk pool to be launched before starting chemotherapy and radiation.
"I asked my doctor if we could wait, and she said as long as it's July, right in July, then you'll be okay," O'Brien said. "It was perfect timing."
NOT UNIVERSALLY AFFORDABLE
Michael Keough oversees North Carolina's temporary new pool that can enroll up to 8,000 people. Seventy-five people in the state were slated to obtain coverage in August, fewer than Keough expected.
"What we're finding, and it's not surprising to us who have been dealing with the uninsured, is that they're a challenging population to reach out to," said Keough, the pool's executive director.
"They've established patterns, albeit not the healthiest ones, for seeking health services, like through emergency rooms, and they tend to be pretty price sensitive as a result."
Monthly premiums in the North Carolina pool, which range from $183 to $729, are a third lower than in the state's existing high-risk pool, Keough said. But, he noted, that is still too expensive for some people.
"When you lower prices and remove barriers, as the president has attempted to do, as Congress has attempted to do, how will people react?" he asked. "The big question is, if you build it will they come?"
Some worry about what will happen if demand for the high-risk pools is too high.
As many as seven million Americans are eligible for the pools, according to the National Institute for Health Care Reform.
If enrollment is not capped at around 200,000, an additional $5 billion to $10 billion would be needed, according to the Congressional Budget Office.
HHS predicts that 200,000 people will be enrolled at any given point, less than half of the CBO's estimate, and that funding will be adequate.
Several states have set enrollment limits to make sure the money lasts until 2014, but HHS has said such action is premature. "We just opened, so we have no plans to cap the program any time soon," said Richard Popper, deputy director of a new insurance office at HHS.
Existing state pools with lower subsidies already spend $2 billion a year to insure about 200,000 people, said Vernita Bridges-McMurtrey, executive director of the National Association of State Comprehensive Insurance Plans.
"It's easy to see that $5 billion won't go very far," Bridges-McMurtrey said. "These pools weren't designed to be the answer for the uninsurable population. It's clearly a temporary measure to address as many as we possibly can with the dollars allowed."
But Keough said he thinks a special effort will need to be made to inform and educate people about the high-risk pool program. And, he said, "I don't think that means that we might not still run out of money at some point. I don't think it's going to be as quickly as has been feared."
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