Obama’s Risk Pools: Another Failure
Now that Obama’s CLASS Act has crashed and burned, you may be wondering what ever happened to his much-vaunted high-risk pools.
The administration has not been making much of it — a sure sign that it must be failing. And so it is. On October 14 it posted the enrollment data as of August 31, 2011. It turns out that 13 months after the pools went into effect, 33,958 people had enrolled, less than 10% of the 375,000 CMS predicted would be enrolled by the end of 2010.
It is not for lack of effort. In July of this year, CMS cut premiums “significantly” in the 24 states where the Feds run the programs to encourage enrollment, according to the official web site. Yet, curiously, of the 5 states with the largest enrollment — Pennsylvania (3,936), California (3,368), Texas (2,650). North Carolina (2,146), and New York (1,998), only Texas is federally run.
At least in failing, the Feds haven’t spent as much money as it intended to. The GAO issued a report in July that noted the program has spend only 2% of the $5 billion that had been budgeted.
Now some of us suggested that rather than creating a whole new program, the Feds should have simply provided financial aid to the state risk pools that were already in existence. These state pools had the distinct advantage of not requiring applicants to be uninsured for six months prior to enrollment. But the administration could not imagine that the states could do anything better than it could, so it insisted on reinventing a wheel — poorly.
I thought Texas had its own high-risk program — did that just go away under the new law?
There is no benefit at all in creating multiple, redundant programs just to make a political showing.
That last sentence of the post is so true: the federal government often thinks that it can do something better than the states all to often and it ends up costing tax payers and over-regulating individuals. Bureaucrats take providing for the “general welfare” too far.
The ObamaCare risk pools aren’t quite redundant–the state risk pools usually required that people had made an effort to be insured before they became uninsurable. If one didn’t meet those requirements then there was a financial penalty if one became sick and wanted an insurer to subsidize the costs.
A typical requirement for people who were uninsured and then want to buy into the state high risk pools is that one can buy into the high risk pool and get coverage for new conditions but that there is no coverage for six months or a year for pre-existing conditions. This is a reasonable requirement that prevents people who didn’t maintain coverage from preying on those responsible who did.
Because the meme of the left was that the uninsured were made up of people who were uninsured through no fault of their own because insurers refused them, or, even less accurately, dropped them when they became ill, the ObamaCare pools required that people be uninsured before enrolling.
People flocking to this new vehicle would, the thinking went, demonstrate the absolute necessity for a solution like ObamaCare.
But they aren’t flocking, at least in part because the left analyzed the problem incorrectly–insurance costs money, and a lot of people decide that buying it doesn’t make sense for their circumstances. In fact, there are data suggesting that some people will refuse to purchase health coverage even if it costs just a few dollars a month.
When asked, the KS Insurance Commissioner’s office admitted that the claims paid out for the few (240)people in the KS run federal exchange cost far more than the feds had anticipated (roughly $12 million the first year). One committee member remarked that this cost seems high for paying claims for one year for so few people. The commissioner assured the legislators on the health committee that HHS said they would pay claims from the national pool of funds set aside for the high risk pools, so no one should worry that the grant of $36 million might be exhausted before 2014 when the pool goes away and those folks are “absorbed into the exchange.”