High Risk Pool Premiums Will Drop, Eligibility Expand

As it gains experience, the Federal government continues to “tweak” health reform measures to make them more useful to more people. The latest effort comes from the Department of Health and Human Services (HHS) which has announced that premiums in the Pre-Existing Condition Insurance Plan (PCIP) will be reduced by as much as 40% in 18 states with federally-administered PCIPs. And HHS will ease PCIP eligibility standards in 23 states and the District of Columbia to help more individuals with preexisting conditions sign up for the program.

You will recall that the Affordable Care Act established the PCIP for so called “high risk” (read “expensive”) individuals with preexisting conditions who have been uninsured for at least six months. The PCIP is supposed to end on Jan. 1, 2014, when individuals enrolled in a PCIP will be transferred to coverage in a state-based Health Insurance Exchange. In 23 states and the District of Columbia, the PCIP program is federally-administered. The remaining states operate their own PCIP programs using federal funds provided by the ACA.

The PCIP premium decreases will help bring PCIP premiums closer to the rates in each of the affected state’s individual insurance market. Premiums will remain the same in the remaining six states (Hawaii, Idaho, Massachusetts, North Dakota, Vermont, and Wyoming) where PCIP premiums were already well-aligned with state premiums, HHS said.

Also, starting July 1, 2011, individuals applying for coverage under the PCIP can simply provide a letter from a doctor, physician assistant, or nurse practitioner dated within the immediately preceding 12 months stating that they have, or at any time in the past had, a medical condition, disability, or illness. Applicants will no longer have to wait for an insurance company to send them a coverage denial letter, although they will still need to meet other eligibility criteria, such as of U.S. citizenship or legal residence and uninsured for six months.

A comprehensive analysis of the Affordable Care Act, including the full text of the law and additional information on health reform implementation, and other recent developments in employee benefits, is available here.