ObamaCare's High-Risk Pools Cost Twice as Much Per Person As Projected


Enrollment in ObamaCare's high-risk insurance plans—intended to provide immediate coverage for the especially difficult to insure until the law's major insurance expansions start up in 2014—has so far been underwhelming: Fewer than 50,000 people are enrolled in the program, according to a new report from the Centers for Medicare and Medicaid Services. Initial estimates had projected that around 375,000 people would end up enrolled, possibly pushing it far over budget before 2014.

Overall, the program has so far spent just $600 million of the $5 billion it was allocated. But on an individual basis, patients have been far more expensive to treat than projected, costing quite a bit more than similar high-risk plans offered by states prior to ObamaCare.

The Washington Post's Sarah Kliff reports:

Those who have enrolled in the program are projected to have significantly higher medical costs than the government initially expected. Each participant is expected to average $28,994 in medical costs in 2012, according to the report, more than double what government-contracted actuaries predicted in November 2010. Then, the analysts expected that the program would cost $13,026 per enrollee.

The costs also are significantly higher than those of similar high-risk pools that many states have operated for decades. States spent an average of $12,471 on enrollees in 2008, according to the National Association of State Comprehensive Health Insurance Plans.

Why is it so expensive? Because the plan's design attracts the sickest and most expensive patients. So far, most of the money has gone to treatments for a few very costly conditions—cancer, heart disease, and so on. According to a CMS official quoted in the article, the regulated rates and plan designs make it possible for those with such conditions to start in on high-cost treatments immediately after enrolling:

"Once you're enrolled you can begin chemotherapy the first day of your coverage," said Richard Popper, deputy director of insurance programs at CCIIO. "We had individuals who enrolled and in their very first week went into surgery."

No surprise there: Those most likely to enroll in a program like this are those who stand to gain the most from it. 

Mostly what we learn from this story is that it's unwise to put too much trust in the cost and enrollment projections made when the health care overhaul was passed. The law's early retiree reinsurance program blew through its money far faster than expected. The long-term care program was passed on the promise that it could be made fiscally sustainable; the administration pulled the plug when it turned out that wasn't true. The high-risk plans, meanwhile, are turning out to cost far more per-person than anyone guessed—but enrollment is far lower. I'm not suggesting we should completely ignore projections for the Medicaid and exchange provisions that make up the bulk of ObamaCare's insurance expansion. But this is what the Congressional Budget Office was warning about when it repeatedly noted that its ObamaCare cost projections were "subject to substantial uncertainty." And we should expect more deviations from the projections as implementation continues.  

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  1. Let’s just get straight to RC’s law-

    Foreseen consequences are not unintended.”

    I got that right, yes?

    1. Actually, its “Foreseeable”, but close enough.

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  2. So you’re saying that no single person or committee can have all of the knowledge that millions of people use everyday to make myriad economic decisions and therefor cannot successfully plan even part of an industry let alone a whole economy? Unpossible!

  3. …very costly conditions?cancer, heart disease, chemotherapy, and so on.

    And here I had no idea that Chemotherapy was a condition rather than a treatment!

    1. Unclear on my part. Noted and updated accordingly.

    2. If you’ve ever had chemotherapy, you’ll discover that it is a condition of its own.

      1. I know a girl who’s going through experimental chemo for stomach cancer. She’s still got her hair and optimism.

        For now, anyway.

        1. I wish her the best of luck. Not all chemo is equal, and not everyone suffers equally. But when it’s bad, it’s bad.

  4. john|2.22.12 @ 12:29PM|#
    We will find out rather. But libel certainly does. And I am going to sue whoever is doing this. Again, if it is you, you need to stop. I doubt you have any assets. But that is okay. I wouldn’t do it for money…And constantly posting after someone with libelous material, would count as cyber stalking in most jurisdictions. Again, if it is not you, you have nothing to worry about.-..I have idea who you are and I really don’t care. And if you are not the one doing it or if it stops, I will never care. But understand if you are doing it and it does continue, I will find out who you are and it will stop. It is really that simple.

    John|2.24.12 @ 9:04AM|#I Don’t do it LH. The pictures she puts up will scar you for life. If you do read it, you can see where the white indian crap comes from and how there is no doubt she is white indian.

      1. Ignore it, please. Responding to it only causes problems.

  5. ObamaCare’s High-Risk Pools Cost Twice as Much Per Person As Projected

    I coughed my lunch out and almost choked to death after reading such surprising and unexpected news – I mean, who wouldva thunk it???

  6. By the way, I noticed that there’s now a 900 character limit for postings. Did the White Imbecile had anything to do with that? Please say “yes”!

    1. Yes, there is and it’s a pain in the ass. A limit of 900 is too low; 2000 would be reasonable, better and would handily curtail WI. Besides, there goes Herc and, frankly, I for one kinda get a kick out of him.

    2. Email me if you want, and I’ll fill you in.

      1. Sugarfree,

        Let me get back to you because I prefer to send gmail e-mails from home, since my work computer has an older IE which is a pain in the ass.

        1. Not a problem.

  7. Sort of related:
    Poll finds CA residents happy to raise other peoples’ taxes!
    Of course (citing RC’s law) the money will be well spent…

    1. people are always willing to raise taxes on someone else. I’m telling you – a govt that takes from Peter to give to Paul can always count on Paul’s support. The number of Pauls keeps rising.

      I wonder if we could plot on a chart the dwindling level of support for tax hikes as the income threshhold is lowered.

      1. a govt that takes from Peter to give to Paul

        Everyone keeps saying this, and I’ve never seen one red cent.

        1. Well, don’t blame me!

  8. But on an individual basis, patients have been far more expensive to treat than projected, costing quite a bit more than similar high-risk plans offered by states prior to ObamaCare.

    Of course it does. Give it for “free” and the first to want it will be the ones with the higher opportunity cost.

    1. People joining high risk pools have a lot of medical problems? Weird.

  9. Those who have enrolled in the program are projected to have significantly higher medical costs than the government initially expected.

    I like the Post reporter’s tone here. “Significantly higher […] than the government initially expected.”

    Yet in reality, the results are exactly what many with half a dozen working braincells predicted.

    Healthcare isn’t free.

    On a side note, there’s a whole boatload of doctors who believe that I.T. services should be free, so I guess it all evens out in the end.

  10. Uh, there are a whole boatload of doctors who think healthcare should be “free”, but somehow, they expect to get paid.
    Med school doesn’t confer degrees in econ.

  11. The extra costs get deducted from Obama’s paycheck, right?

    1. It’s a risk pool. Obama is the lifeguard: Everyone back in the pool!

  12. This one pairs up nicely with the post yesterday about the supposed defeat of “central planning” socialism, no?

    1. Yes, this post proves that our healthcare isn’t centrally planned enough.

  13. Did you see and hear how well Obama can sing?

  14. I’m shocked–shocked–to learn there’s…aaaaah fuckit!

  15. The sickest people will be the population most likely to sign up for subsidized health insurance. So the fact that the intial enrollees cost more than a larger population si not really unexpected.

    The article talks about people signing up and immediately getting chemo. If we scrap Obamacare will these people continue to get chemo? If so who will pay for this cost?

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