Why Hasn't Anyone Signed Up For the High-Risk Health Insurance Pools?

I've predicted that lots of parts of Obamacare will not work the way they're expected to.  But here's one I wouldn't have predicted: the high-risk pools, which were meant to tide people over until 2013, have signed up just 18,000 people as of March.


There were supposed to be millions of people who were uninsurable because of pre-existing conditions.  We heard lengthy testimony about their terrible plight.  I don't think it's too strong to say that this fear--that you could get sick and no one would insure you, that's right, you, Mr. & Mrs. Middle-Class Voter--was one of the main reasons offered for the health care overhaul.  It was estimated by Medicare's Chief Actuary that around 400,000 would sign up (the CBO estimated 200,000, but only because they assumed that HHS would use its authority to limit enrollment in order to stay within the $5 billion budgeted for the program).  So where are all the uninsurable people?

The explanations so far offered don't sound very convincing to me.  Suzy Khimm channels Nancy Pelosi to suggest that the political controversy over Obamacare has somehow prevented people from finding out about high-risk pools.  I could certainly see how that would account for fewer-than-expected signups . . . but a 95% reduction?  It sort of strains credulity to say that only 18,000 uninsurable people in the whole country are aware that the pools exist--at least, if you believe that all the rest of the uninsurable people care about getting health insurance.

Then there are those who claim that the problem is excessively stringent requirements.  But the requirements aren't really all that stringent.  You have to have been denied coverage by an insurer or offered insurance at a rate twice or more what a healthy person would pay.  Annoying, to be sure.  But it's not some monumental hurdle that only the most heroic and motivated uninsurables could surmount; after all, the way that you know you're uninsurable is that, well, companies refuse to insure you.

The only argument that makes even a little bit of sense is that the premiums are high.  But the people doing the projections knew that the premiums were going to be high.  And besides, they're not, like, insanely high; the average monthly premium in North Carolina is $285 with a $3500 deductible, down from maybe $400 last year.  I'm not downplaying that amount--it's a big hit on an ordinary budget--but for someone who's got a serious pre-existing condition, this should be money well spent.  I don't know how to reconcile the previous claims of large numbers of uninsurables who were going without needed insurance and treatment, with the current claim that there are now only 18,000 people in the whole country who are a) uninsurable and b) able to afford several hundred dollars a month in health care premiums.  Even adding together all three factors, cost, lack of awareness, and the need to provide proof that insurance was refused, I don't understand how the estimates could have been so far off.

The administration is now loosening the requirements (you just need a note from a doctor or nurse saying you've been sick in the last year) and lowering premiums.  But this doesn't mean that they're finally covering more "uninsurables"; it just means they've decided to use the money allocated for those people to cover someone else.  They're changing the "high-risk pools" to something that looks a lot more like simply subsidizing insurance.  But the goal wasn't to spend the $5 billion that HHS got in its budget; the goal was to provide insurance for people who want to buy insurance, but can't find a company willing to write it.  

Since we don't seem to be able to find many of those people, HHS is using the money to cover anyone who lacks insurance and can get a doctor to attest that they've been sick in the last year.  They will eventually no doubt claim that the high-risk pools were a success, relaxing the conditions until they can say they've covered 200,000 or so people.  But the mystery will not have gone away.  Where are the unsinsurables?  And why didn't they want to buy insurance?

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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