Governor Riley says Alabama will not run high-risk insurance pool

MONTGOMERY, AL - Governor Bob Riley notified the federal government that Alabama will not be implementing the Obama administration's high-risk insurance pool because of concerns the state's federal allotment will not be enough to cover the cost of the subsidized insurance.  The decision means Alabama is deferring to the U.S. Department of Health and Human Services to implement such an insurance pool in Alabama.

"This decision wasn't made lightly.  A team from our Insurance Department has been working every day since the Obama health care plan was passed trying to come up with a way for the state to do this.  We would prefer to have Alabama people dealing with Alabama people.  However, after an exhaustive review, we've determined it would be impracticable if not impossible for the state to assume this liability," said Governor Riley.

The Governor made his decision known in a letter to HHS Secretary Kathleen Sebelius on Friday, the deadline for states to tell the Obama administration whether they will run the high-risk insurance pool for the uninsured or leave that for the federal government to do.

In his letter to Secretary Sebelius, Governor Riley says the decision is based "on the firm belief that premiums collected, plus the federal allocation, would not be sufficient to cover all losses the pool would incur" through 2013.  "Alabama does not have legal authority for the Alabama Department of Insurance to obligate state funds to cover any shortfall without approval of the Alabama Legislature."

Alabama Insurance Commissioner Jim Ridling said the federal government was unable to answer many of the state's questions before Friday's deadline.

"They have published zero regulations on this," Commissioner Ridling said.  "Without knowing what regulations will be attached to this program or the premium structure or what the cost will be, the state can't take this kind of liability."