WASHINGTON – As many as 20 states likely will not operate new insurance programs for Americans who have been denied health coverage, forcing the U.S. government to step in and placing a new burden on the Obama administration to implement its health overhaul, according to administration officials.

Democrats earmarked $5 billion in the recently passed health care legislation to create state-based, high-risk pools as a way to help sick, uninsured Americans between now and 2014, when new insurance regulations will prohibit insurers from denying coverage to people with pre-existing medical conditions.

But a succession of mostly Republican state officials led by the Georgia insurance commissioner has been rejecting the idea of creating state pools, voicing concerns that state governments would end up having to pay some of the costs of operating the pools over the next 3½ years.

“We are very concerned that funding will not be sufficient,” Nebraska Gov. Dave Heineman, a Republican, wrote to Secretary of Health and Human Services Kathleen Sebelius this week, explaining his decision to opt out of the program.

Friday afternoon, a deadline set by Sebelius, 15 states had informed the Department of Health and Human Services that they would not set up new pools, including South Carolina, Minnesota and Wyoming.

Twenty-eight states, including California, Illinois, New York and all of the New England states, indicated they would set up their own pools.

In the capital, administration officials said they are preparing to operate the pools in any state that chooses not to participate and expect to be able to fund all the programs without putting new burdens on states.

Consumers will be eligible for the pools if they have a pre-existing condition and have not had insurance for at least six months. They will pay premiums that parallel rates offered by insurers to healthy people on the individual market.


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