Part of Obamacare was a transitional "High Risk Pool" program to cover people who were unable to get insurance until the rest of the law's provisions kicked in in 2014. The program allocated $5 billion. Medicare's chief actuary assumed that it would attract 400,000 people; the CBO projected 200,000--but only because they assumed that HHS would use its authority to limit enrollment in order to keep the program below its budgetary cap.
Because nationwide enrollment has been far less than expected, federal funding for the program established under the health overhaul appears plentiful: $5 billion was set aside and less than $500 million has been spent in the first 16 months. The program is scheduled to end in 2014 when insurers can no longer deny people coverage for pre-existing health conditions.
But funding allotments for a few states are beginning to run low, largely because health costs have been higher than expected.
Officials in both California and New Hampshire feared they might start running out of funds by early next year. California, which was allotted $761 million initially, was given an additional $118 million.
New Hampshire, which was allotted $20 million, was given another $30 million. New Hampshire, which has 260 people enrolled in the program, had spent $12 million on the program through September. "The people who enrolled were sicker than anticipated," said Roland Lamy, assistant director of the New Hampshire Health Plan, a nonprofit group that is administering the high risk pool.
Given that half of the enrollment has come in the last 3-6 months, however, it's not all that comforting to hear that they haven't spent so much money--yet.
This isn't exactly surprising: When the federal government created a new health insurance program catering to those who have had trouble obtaining insurance in the past, it makes sense that those who have very high medical costs would be first in line. It hasn't helped that the premiums have proved relatively pricey: In Montana, the monthly premium for the high risk pool is as high as $681. Anyone who enrolls in a plan with that kind of premium likely expects to have relatively expensive medical costs in the near future.
It's probably unsurprising, given that I opposed the law, that I am much more worried about what this means for the budget projections that were used to pass Obamacare. Even after heroic efforts by HHS to boost enrollment, the headcount estimates seem to have been off by 80-90%. But the cost estimates seem to have been off by much less: if we've already spent 10% of the money on 10-20% of the patients, and we still have two years to go, it's reasonable to assume that we're going to be spending at least twice as much as expected per patient, and probably much more.
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