High Risk Pools More Costly Than Expected

Blow me down! The high risk pools, an early feature of PPACA, are proving more costly (and, coincidentally, attracting fewer people) than anticipated:

An early feature of the new health-care law that allows people who are already sick to get insurance to cover their medical costs isn’t attracting as many customers as expected.

In the meantime, in at least a few states, claims for medical care covered by the “high-risk pools” are proving very costly, and it is an open question whether the $5 billion allotted by Congress to start up the plans will be sufficient.

Federal health officials contend the new insurance plans, designed solely for people who already are sick, are merely experiencing growing pains. It will take time to spread the word that they exist and to adjust prices and benefits so that the plans are as attractive as possible, the officials say.

Sounds to me like the experience with the reformed version of healthcare is pretty much what the experience with Medicare was forty years ago. It’s going to cost a lot more than the folks who voted for it expected. Or said they expected.

3 comments… add one
  • steve

    Devil is in the details. In this case a lot more expensive means that they have set rates at or slightly below what typical insurance would cost for someone w/o any pre-existing conditions. Unfortunately, individual insurance costs a lot. These people may have been hoping that insurance under this plan would be nearly free. Not so. This should change in 2014 when subsidies arrive for those who truly cannot pay.

    Interesting spin by the author. First they say no one is signing up, then they claim that $5 billion may not be enough.

    Steve

  • Steve,

    These people may have been hoping that insurance under this plan would be nearly free. Not so. This should change in 2014 when subsidies arrive for those who truly cannot pay.

    Or maybe people theoretically can pay but don’t want to because, as you note, insurance is really expensive. Kaiser says the average is about $14k a year for a family which is a massive chunk of change for most people. My family is in the top 15% of income earners and $14k would would be almost 20% of our income.

  • john personna

    Of course any pool that accepts preexisting conditions is going to suffer huge losses, just as long as there is no universal care (or mandate).

    (Another reason to just do a pseudo Canadian, French, German, or Whatever system and be done with it.)

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