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New High Risk Pools: Underfunded, Over-Hyped and Overdue

June 28, 2010

As the New York Times noted, the new high-risk pool program — something the Obama Administration has desperately hyped in an effort to boost low approval ratings for its health care law — is so under-funded that it will cover “fewer than 10 percent of those denied health insurance because of pre-existing medical conditions.”  According to the New York Times

  • Insufficient Funds Leave People, States In a Lurch:  Americans with pre-existing conditions and State budgets “could then be left in the lurch, seeking other sources of coverage.  Some governors cited this concern in deciding not to apply for federal money.” 
  • Enrollment is Limited:  “State officials said they would freeze enrollment if necessary to keep within their budgets.”
  • Premiums are Very Expensive:  “Kären J. Larson, executive director of the Washington State Health Insurance Pool, estimated that 2,300 people would qualify.  But she said premiums could be high — $800 a month for a 45-year-old buying a policy with a $500 deductible.”
  • Patients, Taxpayers Could Pay Even More than Expected:  “It is not clear who would be legally responsible for claims that remain unpaid after a state’s allotment runs out.” 

None of this should come as a surprise, given that both the Congressional Budget Office (CBO) and the Obama Administration’s own Medicare actuaries estimated the program was woefully underfunded with money being exhausted in as little as one to three years:

  • Medicare Actuaries: “By 2011 and 2012, the initial $5 billion in federal funding would be exhausted resulting in substantial premium increases to sustain the program.”
  • CBO: Funding will “not be sufficient to cover the costs of all applicants” and “available funds will probably be exhausted prior to 2013.”

As if these facts weren’t disturbing enough, the New York Times also noted that the program is already behind schedule: “The temporary program for uninsured people with pre-existing conditions was supposed to be established within 90 days after President Obama signed the health care law — that is, by last Monday.”