The California Pre-Existing Condition Insurance Plan (PCIP) is growing rapidly, but the number of enrollees is still much lower than expected, and the average amount of claims per enrollee is much higher than expected.
The state’s Managed Risk Medical Insurance Board has reported on PCIP program performance in documents posted in connection with a recent board meeting.
If the Patient Protection and Affordable Care Act of 2010 (PPACA) takes effect on schedule and works as drafters expect, it will require insurers to start selling subsidized coverage on a guaranteed issue, mostly community-rated basis in 2014.
Congress added the PCIP program to PPACA in an effort to provide immediate relief for uninsured people with health problems.
PCIP is supposed to provide comprehensive health coverage for people with health problems for a price similar to the price of ordinary individual commercial health coverage.
Eligibility is not based on income, and the risk pools cannot charge higher rates for people with more severe health problems.
Congress let states choose between running PCIP risk pools themselves or letting HHS provide PCIP risk pool services for their residents.
To avoid crowding out existing commercial health coverage and government-provided coverage, including existing state-funded risk pools, PPACA drafters required that PCIP enrollees have gone without any form of health coverage, including state risk pool coverage, for at least 6 months.
Program critics originally predicted that millions of uninsured Americans with health problems would rush to enroll in the program and quickly use up federal PCIP funding. At the end of August, only about 34,000 people were enrolled in the program.
California was expecting to have about 23,000 residents in its PCIP program by February 2011, and it was expecting those enrollees’ claim costs to average about $1,100 per member per month.
As of the end of October 2011, the program had received about 8,500 applications and enrolled about 6,000 people. The program ended the month with 5,300 enrollees, up from 513 enrollees a year earlier. The enrollees have been averaging claim costs of $3,100 per member per month, officials say.
The high cost means that, unless more funding surfaces, the program can afford to serve only about 6,800 enrollees at a time, not 23,000, officials say.
The state has found that 19% of the enrollees are ages 29 or under; 41% are ages 30 to 49, and 39% are ages 50 to 64. Only 25% of the applicants have had help with filing their applications, and 96% of the subscribers speak English.
About 50 insurance agents and brokers have earned PCIP continuing education credits, and 120 people with the Certified Application Assistant designation have become PCIP certified.
Officials found that program vendors seem to be doing a good job of running the program. The plan administrator is processing 91.5% of clean claims within 10 business days, compared with a goal of 90%, and the administrator has resolved all disputed claims within 30 days, compared with a goal of 95%, officials say.