However, they stressed that coverage for about 100,000 people who are currently enrolled in the high risk pools won't be affected.
"We're being very careful stewards of the money that has been appropriated to us and we wanted to balance our desire to maximize the number of people who can gain from this program while making sure people who are in the program have coverage," said Gary Cohen, director of the Department of Health and Human Services's Center for Consumer Information and Insurance Oversight. "This was the most prudent step for us to take at this point in time."
The program, which was launched in the summer of 2010, was always intended as a temporary bridge for the uninsured. But it was supposed to last until 2014. At that point, the health-care law will bar insurers from rejecting or otherwise discriminating against people who are already sick, enabling such people to buy plans through the private market.
From the start, analysts questioned whether the $5 billion that Congress appropriated for the "Pre-existing Condition Insurance Plan" — as the program is called — was sufficient.
Initial fears that as many as 375,000 sick people would swamp the pools and bankrupt them by 2012 did not pan out. This is largely because, even with premiums comparable to those charged to healthy people, the plans sold through the pools are often expensive.
But it was also because the pools are only open to people who have gone without insurance for at least six months. The result is that only about 135,000 people have gotten coverage at some point but they are proving far more costly to insure than predicted, Cohen said.
Many go untreated while they are uninsured, exacerbating their medical problems. When they finally do get covered through a high-risk pool they are in immediate need of expensive care.
"What we've really learned through the course of this program is that this is really not a sensible way for the health-care system to be run," Cohen said.
Of the original $5 billion, only about $2.36 billion remains for the final three quarters of 2013 — enough only to continue coverage for those already in the pools, according to administration estimates.
The law gave states the option of administering their pools directly, or allowing federal authorities to operate them. In 27 states that have chosen direct management, applications for new enrollment will be accepted through March 2. In 23 states and the District of Columbia, where the pools are operated by the federal government, only applications received through Friday will be considered.
Obama officials said they did not have estimates of how many more people would have sought coverage through the pools beyond then.
However, Cohen said that new enrollment has averaged about 4,000 people per month over the past several months, suggesting that the figure could number in the tens of thousands.
Asked why the administration has not requested additional funding from Congress to keep the program open — admittedly a tough sell in the current political and budgetary environment — Cohen said:
"My responsibility is to work with the appropriation we have."