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Healthcare reform law provides coverage for pre-existing conditions

Robin Wulffson MD's picture
Affordable Care Act, Pre-Existing Condition Insurance Plan, PCIP, insurance

WASHINGTON, DC – On February 23, Health and Human Services (HHS) Secretary Kathleen Sebelius announced that the new healthcare law’s Pre-Existing Condition Insurance Plan (PCIP) program is providing insurance to nearly 50,000 individuals throughout the nation with high-risk pre-existing conditions. These individuals were denied insurance coverage due to pre-existing conditions and are ineligible for Medicare or Medicaid coverage.

The PCIP program, which was created by the Affordable Care Act, provides coverage for individuals suffering from such conditions as diabetes, asthma, cancer, and HIV/AIDS. Even if insurance coverage is not denied by an insurance carrier as a pre- existing condition, the cost for the coverage is often beyond the reach of most Americans who purchase their own insurance. Thus, millions of Americans are without coverage for their health problems.

The program is a stopgap measure because, beginning in 2014, a provision of the Affordable Care Act will prohibit insurers from denying coverage to any American with a pre-existing condition. Until then, the PCIP program will provide enrollees with affordable insurance coverage. PCIP covers a broad spectrum of health benefits and is designed as a bridge for people with pre-existing conditions who cannot obtain health insurance coverage in today’s private insurance market. When the 2014 provisions take effect, all Americans, regardless of their health status, will have access to affordable coverage either through their employer or through new competitive marketplaces known as Exchanges. In addition, health insurers will be prohibited from charging more or denying coverage to anyone based on the state of their health.

Secretary Sebelius noted, “For too long, Americans with pre-existing conditions were locked out of the health care system and their health suffered,” said HHS Secretary Kathleen Sebelius. “Thanks to health reform, our most vulnerable Americans across the country have the care they need.”

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The PCIP program is administered by either the state or the federal government: 23 states and the District of Columbia opted to have their PCIP program administered by the federal government while 27 states have chosen to run their own programs. Enrollment in PCIP has risen almost 400% from November 2010 to November 2011. Within the upcoming months, enrollment is expected to trend upwards of 50,000 enrollees. In many instances, PCIP participants have been diagnosed with and need treatment for serious healthcare conditions such as cancer, ischemic heart disease, degenerative bone diseases, and hemophilia. As a result of the new law, PCIP enrollees began receiving health services for their conditions on the first day their insurance coverage began. Their urgent treatment needs, combined with their lack of prior health coverage has resulted in higher overall per-member claims costs in state-based PCIPs of approximately $29,000 per year, which is more than double the per member cost that traditional State High Risk Pools have experienced in recent years.
The program provides comprehensive health coverage, including primary and specialty care, hospital care, prescription drugs, home healthcare, hospice care, skilled nursing care, preventive health and maternity care. It is available to all legal US residents regardless of income who have been without insurance coverage for at least six months, and have a pre-existing condition, or have been denied health insurance coverage because of a health condition.

Enrollees in the PCIP program are not charged a higher premium because of their medical condition; they pay a comparable premium rate to that of a healthy individual. By law, premiums may vary only on the basis of age, geographic area, and tobacco use.

The Affordable Care Act directed the Secretary of HHS to carry out PCIP either directly or through a contract with a state or nonprofit entity. In 27 states, a state or nonprofit entity elected to administer PCIP, while HHS operates the program in the remaining 23 states and the District of Columbia.

Reference: Health and Human Services

See Also: Affordable Care Act to support consumer-governed health insurance