What Will The Real Cost Be To Insure People With Pre-Existing Conditions?

When Obamacare was being debated in congress and in houses across America, insuring those with pre-existing conditions was one of its biggest selling points.  Many members in congress, as well as American citizens, supported this legislation based upon its promises to insure those who faced extremely high health insurance premiums or difficulties obtaining insurance coverage because of an illness or other medical condition that requires ongoing treatment.

$5 billion was set aside in a high-risk pool called “Pre-existing Condition Insurance Plan”, or PCIP, to help people with pre-existing conditions obtain insurance.  It was meant as a bridge to insure people with P/E conditions until January 1, 2014 when insurance companies had to provide them with insurance.

Since the passing of the worst piece of legislation ever passed so we could see what’s in it, less than 1/3rd (107,139) of the projected (375.000) people enrolled in the program.  Additionally, the PCIP program has experienced claims costs 2.5 times higher than anticipated.  As a result, the government has pulled the rug out from under the very people they sold their socialized medicine to protect and have closed off further enrolment in the PCIP program.

As of February 15, 2013, there was $2.36 billion left of the original $5 billion allocated to fund this program. This remaining money is only enough to continue coverage for the 107,139 people enrolled in the program through the remainder of 2013.  Doing the math on that, the cost to insure these folks comes out to $22,047 per person for the remaining 9.5 months left in the current year. How much do you want to bet that money doesn’t last through the end of the year?

Gary Cohen, director of the Department of Health and Human Services’ Center for Consumer Information and Insurance Oversight, in charge of the program stated, “What we’ve learned through the course of this program is that this is really not a sensible way for the health-care system to be run.” No shit Sherlock!

In a comparative study between those with P/E conditions enrolled in the PCIP and the Federal Employee Health Benefits (FEHB) health plan conducted by the aforementioned HHS department, the costs to insure people with pre-existing conditions has yielded some frightening results. Compared to FEHB enrollees, some of those realities included:

  • PCIP enrollees have much greater health care needs
  • PCIP enrollees used a higher volume and intensity of services and had higher costs
  • PCIP enrollees had more than 1.5 times as many claims, office visits, emergency room      visits, and procedures
  • PCIP enrollees had more than 5 times as many hospital admissions
  • PCIP enrollees were about 3.5 times more likely to have claims exceeding $10,000

Between those high-cost enrollees in both plans, the comparisons were even more startling, including:

  • More than 3 times as many emergency room visits
  • More than 3.5 times as many claims, office visits, and procedures
  • More than 8 times as many admissions
  • Almost twice the average cost per claim

Perhaps the most striking result of this study was that nearly three-quarters of the claims in the PCIP program were inpatient (42%) and facility care (30%) claims.  Think about that, 72% of the claims required a stay.  Think hospitals will be full next year?

Here are a few other sobering results of the study regarding the PCIP program:

  •  There were 562 hospital admissions per 1,000 enrollees in Colorado (the healthiest state in America)
  • There were 5,174 inpatient days per 1,000 enrollees in Colorado
  • Monthly claim expenditures were $3,449 per member in Kansas ($41,388/member per year)
  • The plan LOSS RATIO was 1,916% in New Hampshire
  • 11% of PCIP enrolees in New Hampshire accounted for 96% of claims costs

In 2011 they estimated the annual cost per enrollee in the PCIP would be $28,994.  The actual cost came in at $32,108.

From May through October 2012 the average monthly cost was $160,000,000 per MONTH for only 40,000 people enrolled by the end of October.  In May of 2012 there were 30,000 people enrolled in the program, so let’s assume an average monthly enrollent of 35,000 people. Doing the math, that comes out to an average of $4,571 per person per month.

Here’s where reality really begins to set in and remember that $2.36 billion is supposed to be enough to insure 107,139 people for the remainder of this year.  Estimates range from 9 million to 25 million people in the US has no insurance and a pre-existing condition.  Based on the most recent monthly cost per person of $4,571, we can estimate an annual cost per person of $54,582.  If we use that figure to extrapolate the costs to insure 9 to 25 million people with a pre-existing condition and no insurance, we can estimate it will cost $493,668,000,000 to $1,371,300,000,000 to insure those people.

Let that sink in for a minute….$494 billion to $1.37 trillion to insure 9 to 25 million people with pre-existing conditions based on the costs we’ve seen from the people enrolled in PCIP.  Even if we halve those estimates, they’re still well beyond what this cost was estimated to be.

Here is the most sobering reality of all, under Obamacare people with pre-existing conditions CANNOT be charged more for insurance than a person who is healthy.  What this means is that the cost to insure these people will be spread amongst all those insured.

Based on these facts, what do you think is going to happen to your insurance rates when claims begin to be filed by people with pre-existing conditions who cannot be charged more than anyone else?

If the Democrats in Congress and the White House miscalculated how much it would cost to fund hundreds of thousands of Obamacare applicants with pre-existing medical problems, imagine how badly it’s low-balling the cost of subsidizing millions of other uninsured Americans.

Imagine how badly they’re underestimating the cost of expanding Medicaid?

Remember when someone claimed Obamacare wouldn’t add one dime to the deficit? Guess what….that POS lied!


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