ObamaCare's High Risk Pools: "Like giving a party to which no one comes."


Lots of people expected that the high-risk pools created by the new health care law would turn out to be underfunded. Medicare's chief actuary, Richard Foster, warned that the state-based health insurance plans, which were designed to provide coverage for individuals with preexisting conditions, would run out of money in 2012, and possibly sometime this year. And a number state governors warned that the program could become a fiscal liability.

Part of the thinking was that the pools might become deluged by a flood of individuals wanting to enroll. After all, these plans allowed individuals to sign up regardless of preexisting conditions, but at rates that weren't substantially higher than a typical individual market plan. Foster estimated that about 375,000 individuals would sign up for the plans. Instead, so far, just 8,000 people have signed up for the plans, according to a December report in The Washington Post. A number of state plans have fewer than 100 members. Yet somehow that hasn't entirely prevented fiscal problems:

Montana is one of a few states in which the medical bills from those who have joined are huge. New Hampshire's plan has only about 80 members, but they already have spent nearly double the $650,000 the state was allotted in federal money to help run the program, said J. Michael Degnan, its director.

The spending, Degnan speculated, might slow down if it turns out that the early bills reflected a burst of pent-up need for care. HHS agreed to give New Hampshire more money, he added.

Remember what The Boston Globe remarked about Massachusetts's continually cash-short Medicaid program? "The money, it seems, is never enough."  If nothing else I think it's impressive that, despite the ultra-low enrollment, New Hampshire has managed to burn through a multiple of its alloted funding already. Dramatically under-used and way over-budget? That takes effort. 

But Obama's Department of Health and Human Services is stepping up efforts to enroll more people: According to The Post, it's "launching an aggressive marketing campaign" in a number of states with low enrollment. If beneficiaries don't seek out the government, the government will seek to find them.

I confess to being fairly surprised about the low enrollment numbers, which are wildly divergent from what was projected, and in a direction that almost no one on either side of the political debate suspected. But NCPA President John Goodman thinks it's a predictable outcome. He describes the program so far as "like giving a party to which no one comes":

While a lot of people are surprised by these numbers, I am not. Here is why. Don't you think it is a bit odd for the White House to send out an appeal to victims so they can identify themselves? That's not normally how the political system works.

The more usual scenario is: victims unite and form interest groups; they lobby Congress, write letters, testify, etc; and eventually the pressure become so great that Congress legislates.

When have you ever heard of that entire process in reverse? When has Congress ever before decided it wants to do something and then conducted a nationwide search to find people who will benefit?

Thanks to David Brooks for the pointer.