WASHINGTON -- Citing financial concerns, the Obama administration has begun quietly winding down one of the earliest programs created by the president's health care overhaul, a plan that helps people with existing medical problems who can't get private insurance.
In an afternoon teleconference with state counterparts, administration officials said Friday the Pre-Existing Condition Insurance Plan, or PCIP, will stop taking new applications. People already in the plan will not lose coverage.
Designed as a stopgap solution until the law's full consumer protections are in effect next year, PCIP has served more than 135,000 people, a lifeline for patients with serious medical problems such as cancer and heart failure. But Congress allocated a limited amount of money, and the administration's technical experts want to make sure it doesn't run out.
Health and Human Services Department spokeswoman Erin Shields Britt said PCIP has "provided needed security to some of our nation's sickest people."
The plan covers people who have had problems getting private insurance because of a medical condition and have been uninsured for at least six months. Premiums are keyed to average rates charged in each state, which means they're not necessarily cheap, often amounting to several hundred dollars a month for middle-aged individuals.
"We're glad this program was here and able to help," said Amie Goldman, who oversees the program in Wisconsin. "I'm certainly disappointed we won't be able to serve everyone who has a need for this coverage."
Starting next January 1, insurance companies will no longer be able to turn anyone away because of poor health. At the same time, the federal government will begin subsidizing coverage for millions of individuals who have no access to employer plans. That means many of the people currently in the PCIP program may end up with lower premiums once the government's financial help is factored in.
The enrollment suspension will take effect immediately in 23 states where the federal government administers the program, Goldman said. Residents of states that run their own programs may have longer. Wisconsin residents, for example, have until March 2 to apply.
Enrollment around the country has been lower than expected, partly because some people could not afford the premiums. But individual cases have turned out to be costlier than originally projected.
In documents provided to the states, the administration said the program has spent about $2.4 billion in taxpayer money on medical claims and nearly $180 million on administrative costs, as of Dec. 31. Congress allocated $5 billion to the plan.
"From the beginning (the administration) has been committed to monitoring PCIP enrollment and spending closely and making necessary adjustments in the program to ensure responsible management of the $5 billion provided by Congress," PCIP director Richard Popper wrote in a memo. "To this end, we are implementing a nationwide suspension of enrollment."
The sole exception: program beneficiaries who move to another state will still be able to get coverage in their new home.
Associated Press writer Ann Sanner in Ohio contributed to this report.