GAO: HHS Already Rationing Enrollment in Obamacare’s Pre-Existing Condition Plan

A pre-existing condition health insurance program established by Obamacare is already straining its own budget and, to control costs, the administration’s Health and Human Services Department (HHS) has stopped enrolling any new people in the program, according to an audit by the General Accountability Office (GAO).

In addition, to further control spending, HHS has directed the program to shift more of the costs onto the current enrollees, thus raising the out-of-pocket health care expenses for the people with pre-existing conditions.

“Finally, due to growing concerns about the rate of PCIP [Pre-existing Condition Insurance Program] spending, in February 2013, CCIIO [under HHS] suspended PCIP enrollment to ensure the appropriated funding would be sufficient to cover claims for current enrollees through the end of the program,” states the GAO report, Patient Protection and Affordable Care Act: Enrollment and Spending in the Early Retiree Reinsurance and Pre-existing Condition Insurance Plan Programs.

The text from the GAO report is interesting, at the very least.

CCIIO stopped accepting applications for ERRP enrollment in May 2011, anticipating the $5 billion appropriation would be exhausted.

As we previously reported, at that time the total number of approved plan sponsors was more than 6,000—most of which enrolled within the first six months of the program—and CCIIO had already spent $2.4 billion reimbursing plan sponsors for claims incurred.

Officials told us that in September 2012, CCIIO suspended making reimbursements to plan sponsors, with reimbursements having exceeded the $4.7 billion cap established for paying claims under the original appropriation nearly a year earlier.

In anticipation of exceeding the cap, CCIIO had issued guidance on December 13, 2011, stating that it would not accept reimbursement requests for ERRP claims incurred after December 31, 2011. However, the program continued to accept requests for claims incurred on or before this date and officials explained that a number of factors led to it taking until September 2012 for all $4.7 billion to be spent, including that reimbursements must go through a clearance process to make sure funds are paid appropriately.

When the $4.7 billion was reached, significant demand for the program remained with 5,699 ERRP reimbursement requests left outstanding that accounted for about $2.5 billion in unreimbursed claims. …

Went broke pretty fast, did it not.

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