Cost of government risk insurance double what was previously estimated

Only a fraction of the people who were supposed to sign up for this program have done so (see here). The government has gone all out to try to convince more people to sign on to it. But the costs for those who have turned out to be wildly higher that the Obama administration had estimated. From the Washington Post:

The health-care law set aside $5 billion for a Pre-Existing Condition Insurance Plan, meant to provide health insurance to those who had been declined coverage by private carriers. Since its launch last summer, nearly 50,000 Americans have enrolled in the program.

The PCIP program will phase out in 2014, when insurers will be required to accept all applicants regardless of their health-care status.

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.

The Obama administration has spent $600 million of its $5 billion budget for the program over the past 18 months. . . .