What Is a Comprehensive Health Insurance Plan?

A comprehensive health insurance plan covers preventive services, such as routine doctor's visits and testing, and catastrophic care such as hospitalization or intensive medical treatment caused by chronic illness. Comprehensive health insurance is commonly associated with plans available to uninsured high-risk groups. Comprehensive health insurance plans generally require payment as deductibles, co-payments or both.

A number of states have comprehensive health insurance plans to provide health coverage to people who can't get health insurance on the private market because of pre-existing conditions or chronic illnesses that classify them as high-risk.

Significance

• Consumers can generally get health coverage from their employer or their spouse's employer on the group market, or can purchase plans directly on the individual market. But high-risk consumers' access to affordable health insurance in group and individual markets can be difficult if not impossible. To promote greater access to affordable coverage, some states have comprehensive insurance plans to offer coverage to high-risk consumers who want and need health insurance.

Purpose

• Comprehensive health insurance plans serve two purposes. They enable uninsured consumers to buy more-affordable health coverage than they could purchase on the private market. And they help to make the private market competitive, by creating a separate market for high-risk consumers so that individual and group markets are less risky and costs are kept down.

Design

• Comprehensive health insurance plans allow states to group high-risk uninsured consumers into one pool that creates a market for insurance companies to compete for. States enter into agreements with insurance companies to sell health coverage to consumers in the high-risk pool. States can negotiate directly with insurance companies for rates and benefits, and they can regulate the programs to ensure consumers are treated fairly.

Cost

• States typically bear some of the costs associated with providing a comprehensive insurance plan, in addition to health care providers through fees and premiums paid by enrollees. Most states have arrangements with insurance companies participating in their comprehensive health plan to sell insurance plans at rates below what high-risk consumer plans would normally cost on the private market. In addition, states typically allow insurance companies to adjust rates on an annual basis.

  Most state comprehensive health plans provide more than one insurance plan option. Costs are generally determined by the type of plan (such as preferred-provider organization or health-maintenance organization), level of benefits, enrollee age, and sometimes gender. Some states offer discounts to income-eligible enrollees, to help lower premium payments and out-of-pocket costs.

Disclaimer

• Comprehensive health insurance plans are designed to help provide coverage to high-risk uninsured people, not the entire uninsured population. Because of the small size of the target group and the voluntary enrollment, it's difficult to estimate the total effect these plans have on controlling health care costs.