* New enrollments suspension begins Saturday
* Officials blame rising costs and limited funding
WASHINGTON Feb 15 The Obama administration on
Friday said it would stop enrolling new beneficiaries in a
special $5 billion insurance program for people with
pre-existing medical conditions, because of rising costs and
The news comes a day after a top U.S. healthcare official
told lawmakers on Capitol Hill that the administration is
grappling with financial difficulties but determined to keep the
Pre-Existing Condition Insurance Plan (PCIP) operating in 23
states and the District of Columbia through 2013.
PCIP was established in 2010 under President Barack Obama's
healthcare reform law to provide coverage for sick people unable
to find it in the private insurance market. The program is
designed as a bridge to Jan. 1, 2014, when legal restrictions
barring discrimination over medical conditions come into force.
The U.S. Department of Health and Human Services issued a
notice on Friday saying it would suspend new enrollments
beginning on Saturday to "help ensure that funds are available
through 2013 to continuously cover people currently enrolled in
"The program has a limited amount of funding from Congress,"
the notice added.
About 100,000 current PCIP beneficiaries are not affected by
the change, which follows more than two years of escalating
enrollments and outlays. Twenty-seven state-run PCIPs will
suspend new enrollments after March 2, HHS said.
The news underscores the financial costs involved in
covering people with pre-existing conditions, including many
with costly chronic diseases, as the $2.8 trillion U.S.
healthcare industry prepares for sweeping reforms that analysts
say could bring higher health insurance costs.
Gary Cohen, the HHS official responsible for overseeing
implementation of Obama's healthcare reforms, including PCIP,
told the Senate Finance Committee on Thursday that the
administration had begun to alter program benefits while
grappling with funding restrictions.
"Running out of money before the end of the year is
something we're trying to avoid," he said.
Obama's Patient Protection and Affordable Care Act allocated
$5 billion to the program for claims and administrative expenses
that exceed premiums collected from enrollees.
An annual report, released on Jan. 31 by the U.S. Centers
for Medicare and Medicaid Services (CMS), showed that monthly
expenditures peaked last June at nearly $180 million and have
since fallen back a level closer to $150 million.
The average cost for an enrollee in 2012 was $32,108 per
enrollee and varied widely from state to state, from a low of
$4,276 to a high of $171,909, according to CMS, which is an
agency within HHS.
Costs also varied widely between enrollees, with 4.4 percent
of PCIP beneficiaries accounting for more than half of claims
paid in 2012.
(Reporting by David Morgan; Editing by Tim Dobbyn)