This article should be read by anyone applying for individual health insurance coverage, with a pre-existing condition sever enough to cause a decline or high rating by an insurance company.In California anyone can obtain health insurance coverage, the only question is the premium. – John Barrett
By Allison Bell – December 13, 2011
The painful birth of the federal Pre-Existing Condition Insurance Plan (PCIP) program — a health insurance program for people with health problems — may be due more to restrictions imposed by Congress than major problems with implementation.
John Dicken, a director at the U.S. Government Accountability Office (GAO), gives that assessment in a PCIP review requested by Senate Democrats. The senators asked the GAO to compare the early progress of the PCIP program to the early progress of the Children’s Health Insurance Plan (CHIP) program.
Dicken notes that Congress tried to keep PCIP risk pool coverage from crowding out existing public and private sources of coverage for people with health problems by requiring that PCIP applicants be uninsured for at least 6 months.
The 1997 law creating CHIP does not include any specific methods for excluding children who already have other health coverage, Dicken writes.
The 6-month no-coverage requirement for PCIP applicants is “the most common factor explaining lower than expected enrollment cited by the state PCIP officials we interviewed,” Dicken says.
Because of the requirements spelled out in the law that created the PCIP program, PCIP coverage costs an average of about $400 per month for a 50-year-old applicant, and the cost of the coverage is another reason for slow early enrollment growth, Dicken says.
“In contrast, many states did not charge any CHIP premiums, and among those states that did, premiums were significantly lower compared to PCIP,” Dicken says.
Congress added the law that created the PCIP program to the Patient Protection and Affordable Care Act of 2010 (PPACA) in an effort to provide immediate relief for people who have a hard time buying health coverage because they have conditions such as obesity, high blood pressure, cancer or hemophilia.
If 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.
PPACA calls for PCIP to provide comprehensive health coverage for people with health problems for a price similar to the price healthy individuals pay for ordinary 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 the U.S. Department of Health and Human Services (HHS) provide PCIP risk pool services for their residents.
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.
Analysts at the Congressional Budget Office (CBO) predicted the $5 billion in funding allocated for the program could accommodate about 200,000 people.
At the end of August, only about 34,000 people were enrolled in the program.
When the CHIP law was passed, CBO analysts estimated that the program would provide coverage for about 2.3 million children after 1999. After CHIP was in effect for about a year, the program had 705,000 enrollees.
States took about 3 years to implement CHIP and just 7 months to implement PCIP, Dicken says.
States with their own high-risk pool programs started their PCIPs faster than states without existing risk pool programs, but PCIP enrollment in the states with state risk pools was just 3.7 enrollees per 10,000 uninsured lives, compared with 5.5 enrollees per 10,000 uninsured lives in states that started with no state risk pools, Dicken says.