High-risk pool options: Rocks and hard places

Nancy Marshall Genzer, by quoting me, highlights a key problem with the interim high-risk pools that started taking applications today. There’s not enough money allocated for them, only $5 billion to get us to 2014. The CBO says that’s only enough for 200,000 enrollees. Based on my 2005 paper on high-risk pools, I think there’s closer to one million likely eligible for them. What to do?

This isn’t a tough one to solve, but none of the options look so hot politically because they can all be spun as a failing of the law. They’re all rocks and hard places. (OK, maybe one or another is a big bed of thorns–cozy!)

  • Turn away applicants once the money runs out? That’s a lousy thing to do and those folks are pretty sympathetic cases. Imagine the media sob stories (justifiably so).
  • Ask Congress for more money? Are you kidding?! What, just a few years into the fabulous new health reform law and you’re already out of money?!?!
  • Raise premiums on the medically needy? How does that play? Not good.

Frankly, I’m surprised the Democrats got themselves into this pickle. The high-risk pools are one of the first things the new law creates. You want the early stuff to be successful. You don’t want to have to admit you blew it. Even if they had put $25 billion into the pools that would have hardly changed the total spending in the bill (close to $1 trillion). Why were they so stingy?

My guess is they’ll sneak a payment increase into some other bill, bury it among all sorts of tweaks, and pay for it with a tiny cut to something else (or claim as much). Nevertheless, it was a silly mistake. Or am I missing something?

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