Health care costs for enrollees in the temporary high-risk insurance pools established by the federal health reform law are expected to be more than double initial predictions, according to a report released by the Obama administration, the Washington Post reports (Kliff, Washington Post, 2/23).
The report also found that between November 2010 and November 2011, enrollment in the Pre-Existing Condition Insurance Plan increased by about 400% -- helped by about 8,000 new applicants monthly in the second half of 2011 -- to about 50,000 U.S. residents. That figure is well short of initial estimates by the CMS actuary, who predicted that 375,000 U.S. residents would enroll by the end of 2010 (Pecquet, "Healthwatch," The Hill, 2/23).
According to the estimates, each enrollee is expected to have an average of $28,994 in health care costs in 2012. Initial estimates by government actuaries were that the program would cost $13,026 per enrollee. In comparison, states in 2008 spent an average of $12,471 per enrollee in their high-risk pools, according to the National Association of State Comprehensive Health Insurance Plans.
The Obama administration said that the high cost of enrollees shows that the pools are serving the intended population.
Reasons for the Higher Costs
According to the report, PCIP enrollees use health care services at higher rates than the general population and have more than eight times as many hospital admissions as workers in the Federal Employee Health Benefits Program (Washington Post, 2/23).
In addition, the report found that the program served 628 U.S. residents with cancer last year who accounted for 27% of the pool's total costs. Other high-cost illnesses and treatments covered by the program included:
- Circulatory diseases, which accounted for 18.6% of the program's spending;
- Rehabilitative and post-surgical care, which accounted for 18%; and
- Degenerative joint diseases, which accounted for 14.4% ("Healthwatch," The Hill, 2/23).
In addition, Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, noted that the program requires enrollees to be uninsured for at least six months before joining, which means many enrollees have "pent up medical demands" that have gone untreated (Washington Post, 2/23).