On May 31, 2011, HHS revealed details of amendments to the cost of premiums for PCIP coverage in some states. From July this year, it may also become easier to enroll in a plan as eligibility criteria will change in affected areas. Who will benefit from reductions in costs and why is the system changing?
18 States Will See a Reduction in PCIP Premiums of up to 40%
Under the current Pre-Existing Condition Insurance Plan system, states can opt into the federally-administered plan or they can manage their own programs. At the moment 23 states and the District of Columbia are federally managed and the changes announced today apply here. The aim is to bring coverage costs in line with regional insurance markets which could see reductions of 40% in some areas.
This doesn't mean that premiums will be lowered across the board. At the moment, reductions only apply to 18 of these states as the other six are already considered to be in line with regional premiums. HHS has informed those states that manage their own programs that they can also modify their plans with these changes if they wish.
New Rules Will Make it Easier to Enroll in a Pre-Existing Condition Insurance Plan
In addition to a reduction of coverage costs the 23 states and the District of Columbia that are under federal management will also see a change to enrollment standards from July 1, 2011. At the moment, individuals need proof of denial from an insurance provider before they are eligible to join a PCIP plan. From July, this will become easier in these states as a letter from a qualified medical professional (dated within the past 12 months) that proves that a relevant pre-existing condition exists will be sufficient. Other criteria will remain the same.
Why Has HHS Changed the Way That PCIP Works?
The Pre-Existing Condition Insurance Plan was established under the Affordable Care Act to help people who would normally be denied health coverage because of a previous medical condition, illness or disability. These changes have a dual target. They should make coverage more affordable and make it easier to apply for a plan.
This should increase the number of uninsured people who take up PCIP coverage. In a report on the changes (HHS to Reduce Premiums, Make it Easier for Americans With Pre-Existing Conditions to Get Health Insurance, May 31, 2011), Secretary Kathleen Sebelius announced that: “These changes will decrease costs and help insure more Americans.” A full list of participating states and the reductions planned can be found on the healthcare.gov website.
Carol Finch - Carol Finch is the Topic Editor for Retirement Planning, Budgeting, E-Commerce & Technical/Business Writing on Suite101.
