Risky Business

The New York Times reports that a number of states are readying new high-risk health insurance pools called for by the PPACA. These high risk pools are intended to serve those who may have difficulty getting insurance because of preexisting conditions or other risk factors. According to the article, "Democrats describe the program as a bridge to 2014, when insurers will be required to accept all applicants."

But if this is a bridge, it's a pretty rickety one. The pools were stuffed into the health care bill in part to give Democrats an early deliverable. As the Times' report notes, the Obama administration hopes that the pools will produce political benefits "for Democrats running in midterm elections this fall." But most of the rewards in politics come from appearing to do something helpful while misleading voters about how much it's going to cost—which may explain why the bill's authors opted to hide the program's true cost by low-balling the funding.

Estimates suggest that as many as 7 million people could qualify for these new pools, but the law only provides enough funding to cover between 200,000 and 400,000 of them. Richard Foster, Medicare's chief actuary, predicts that the $5 billion allotted to fund these pools will run out by 2012, and perhaps even by 2011. And when the money runs out, one of two things will happen: Either the states that decided to run these programs will be stuck with the tab, or the federal government will step in with more funding. No matter what though, it's going to cost more than projected, more than budgeted, and, given our ongoing deficit difficulties, probably more than either Washington or any of state capitol can actually afford.