Short Takes On News & Events

Feds Increase Costs To High-Risk Pool Members

By Phil Galewitz

February 14th, 2013, 3:41 PM

The Obama administration has increased costs for about 38,000 people enrolled in high-risk insurance pools run under the federal health law to prevent the program from running out of money.

The pools, which started in 2010, will expire at the end of the year when new rules prohibiting insurers from denying coverage to people with pre-existing illnesses take effect. The program was funded with $5 billion.

“We have a set amount of money and we will not exceed it,” Gary Cohen, director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services (CMS), told the Senate Finance Committee Thursday. “We are doing everything we can to avoid running out of money.”

Under the changes which took effect Jan. 1, enrollees in federally-administered plans saw their maximum out-of-pocket spending limit increase from $4,000 to $6,250, according to a Jan. 31 report by CMS. Enrollees also began being required to order medicines to treat chronic illnesses by mail order after the second prescription refill.

To further control costs, last August the federally-administered plan reduced its payment rates for providers, particularly to hospitals treating a high number of enrollees. It also reduced the number of pharmacies that dispense specialty drugs in the program.

The federal government runs the plans in 23 states and District of Columbia, while individual states run the rest using federal dollars. The benefit cuts affect only those in the federally run plans.

While enrollment in the pools has fallen far short of expectations—only about 130,000 people enrolled in federal or state plans, compared to more than 300,000 projected—per capita spending has been higher than expected. The average cost per enrollee in 2012 was $32,108 per year and varied widely by state, from a low of $4,276 per enrollee to a high of $171,909 per enrollee. But a small percentage of enrollees have filed average annual claims of $225,000 per person, according to the federal government

To qualify for the program, people must have been without health coverage for at least six months and either have a pre-existing condition or been denied coverage because of a health condition.

State programs have also been under pressure. Early last year, nine states asked the federal government for more funding to make sure their high-risk pools didn’t run out of money before 2014.

According to the latest report on expenses in the program, as of Sept 30, 2011, the program had spent about $1.9 billion.

15 Responses to “Feds Increase Costs To High-Risk Pool Members”

  1. Patrick Skinner says:

    This another example of people who don’t know much about risk sharing try to manage the risk sharing marketplace.

  2. Shazam!

    That is a 50% increase and a preview of Obamacare premiums for everyone.

  3. James says:

    No, Patrick, this is about the private marketplace being a lousy place to force sick people to turn for access to health care.

  4. Ozzie says:


    Premiums for everyone! More participants! Bigger risk pool! Lower risk!

    Sounds to me like the perfect business plan for any successful insurance company.


  5. mandy says:


    Shazam is an ancient wizard who appeared in Captain Marvel comic books. So, he’s a comic book character. A comic book character like most Republicans in Congress these days. Shazam first appeared in 1940. A very dated comic book character. Much like our dated Republican Party these days. The old white man’s party.

  6. Anna says:


    Shazam is also the word Gomer Pile said as an exclamation when something struck him as amazing. And in case you didn’t know, Gomer Pile is from The Andy Griffith show.

    But I’m guessing you already know that since you apparently had to google the meaning of “Shazam”.

    Careful there, your crazy liberal-ness is showing.

  7. mandy says:

    Gomer Pile?

    Shazam! Gomer Pile and the Andy Griffith show fits perfectly when you are trying to describe the Republican Party of the 21st Century, wouldn’t you say?

  8. mandy says:

    Besides, it’s Pyle, not Pile!

    But, I guess you aren’t too familiar with search engines, otherwise you’d never have posted such a mistake, right?

  9. Ginger says:

    I’m in the “black hole” of being 64 with no insurance–not qualifying for public coverage due to $40 a month too much in “unearned income” (SS Retirement), and haven’t been able to afford $400 a month to the state of NY for their “Bridge” insurance for preexisting conditions on my limited SS Retirement amount!

    Have worked over 45 years full time along with a second full time job and/or part time job, having coverage most of the time I was employed. Got sick in 2005, couldn’t work for several years, can now but cannot get a job that offers insurance and just too young to qualify for medicare which I paid into every day I worked!

    Loved the work I did in nonprofits, helped a LOT of people, but ain’t aging wonderful. . .

  10. tammy says:

    Dear black hole,

    That’s a sad story. However, the good news is, you will soon qualify for Medicare. Unless Neanderthal Republicans like Paul Ryan get their draconian budget plans passed and enacted, Medicare should be there for you at age 65. Sadly, Republicans don’t care that you worked two full time jobs for over 45 years and that you paid your Medicare taxes for that entire time, they still want to cancel that promise and then hand you a capped voucher for Medicare and not give it to you until age 67. By the way, there’s no way that capped voucher will ever pay for the care you will need in retirement. The care that you were promised and the care that you fully earned. You see, Republicans hate Medicare. They may say that they want to save Medicare for future generations but that’s a lie. Republicans would be tickled pink to see Medicare disappear tomorrow!

  11. Paul Revere says:

    Collectivism always fails. ALWAYS.

    This PCIP failure is yet another example of the failed liberal ideology.

    Hey, Liberals. TOLD YOU SO!!! (and it’s just gonna get worse)

  12. tammy says:

    Hey, Conservatives. Just another speed bump on the inevitable road to universal single-payer healthcare. Nothing to worry about. (and it’s gonna get better)

  13. tammy says:

    By the way, the only people who get hurt by collectivism are the wealthy 1 percent. For the past few decades, the wealthy 1 percent have rigged the system by each buying their own personal member of Congress. By buying their own personal puppet in Washington. With that puppet power in Congress, the wealthy proceeded to rob the poor and middle-class of the wealth of this nation by passing and enacting laws in their favor. Now, finally the poor and middle-class have said, ENOUGH! Now, the poor and the middle-class want to settle the score and they have someone on their side in the Oval Office. Collectivism works for 99 percent of the people. Another name that I use instead of collectivism is “civilized society”. In a civilized society, we all help each other. We all make sure that nobody fails. We all make sure that nobody is hungry and homeless. That is what people do in a civilized society. Republicans have always been against this theory.

  14. pappy says:

    Republicans like to call themselves “rugged individualists”. It a theory that espouses, “All for one, and I’m for myself”. Being a rugged individualist means saying, I’ve got mine, to hell with you!

  15. Dave says:

    The ignorance stated on this site is incredible. Tammy seems to think there is a conspiracy against all Americans’s by the 1%. Get real…your Progressives members of Congress have mantained a dependency mentality for the last 60 years…been to afraid to educate the public least they see the Emperor Obama has no clothes.
    Try reading about the history of progressive movements around the world. Working real well for them isn’t it.