Monday, February 27, 2012

PCIP - Deal or No Deal?

One of the good things about Obamacare, perhaps the only good thing, is PCIP. The Pre-existing Condition Insurance Plan, should be a god-send for those that are too sick to qualify medically for health insurance in the open market.

Only a very small percentage of individuals truly cannot qualify for health insurance at any given time. Many wait until after they are sick or injured before they consider buying insurance. How convoluted is that?

Others find themselves in the market through no fault of their own.

Regardless of the reason, PCIP is a "port in the storm" for those who need health insurance.

PCIP came in to existence in July, 2010. A grand scheme, it was expected that some 2oo,000 would enroll in the plan during the first year. Here we are almost two years in to the program and fewer than 50,000 have enrolled.

Given the apparent lack of interest you would think the plan is overpriced.

Not so.

A look at current data indicates this is a cash cow. Not for the taxpayers, but for those who bought the plan.

According to the Washington Post, PCIP is spending a lot of taxpayer dollars to keep the plan afloat.

Those who have enrolled in the program are projected to have significantly higher medical costs than the government initially expected. Each participant is expected to average $28,994 in medical costs in 2012, according to the report, more than double what government-contracted actuaries predicted in November 2010. Then, the analysts expected that the program would cost $13,026 per enrollee.

The costs also are significantly higher than those of similar high-risk pools that many states have operated for decades. States spent an average of $12,471 on enrollees in 2008, according to the National Association of State Comprehensive Health Insurance Plans.

Best estimates are the plans are paying out $3 for every $1 in premiums taken in and if the above projections bear out it will hit $5 in claims for every $1 in premium.

Then there is the case of Alaska. KHN reports the frozen state isn't doing a very good job of recruiting folks in to PCIP and the ones they are attracting are very expensive to treat.

A high risk pool set up under the federal health overhaul to help the uninsured who have pre-existing medical conditions expects to spend $10 million this year to cover about 50 members. That’s about $200,000 per person.

Bykerk said the high risk pool has attracted all types of high risk patients, ranging from women who were pregnant and unable to get traditional insurance to children who needed a heart transplant.

Alaska isn't the only state operating in the red.

Colorado has covered 1,087 people in its high risk pool and fears its $90 million allocation will not be enough. “Our claims experience indicates the population covered in this program have significantly higher medical needs than the general insured population,” said Kayla Arnesen, a spokeswoman for the Rocky Mountain Health Plan, which administers the high risk pool.

Kind of makes you wonder how well Obamacare is going to work in 2014. How much money will Obamacare REALLY cost once it is rolled out for everyone?

PCIP is a great deal for the insureds.

Not so much for the taxpayers supporting it.

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