New Pre-existing Condition Insurance Plan in Operation
The U.S. Department of Health and Human Services (HHS) announced July 1 the establishment of a new Pre-existing Condition Insurance Plan (PCIP) that offers coverage to uninsured Americans who have been unable to obtain health coverage because of a pre-existing health condition.
The PCIP will provide a new health coverage option for Americans who have been uninsured for at least six months, have been unable to get health coverage because of a medical condition, and are a U.S. citizen or are residing in the United States legally.
Created under the Affordable Care Act, the PCIP is a transitional program until 2014, when insurers will be banned from discriminating against adults with pre-existing conditions.
The Affordable Care Act provides $5 billion in federal funding to support PCIPs in every state. Twenty-one states have elected to have HHS administer the plans, while 29 states and the District of Columbia have chosen to run their own programs. The national PCIP began accepting applicants July 1 in the 21 states where HHS is operating the program. All states which are operating their own PCIPs will begin enrollment by the end of the summer, if they have not already begun to do so.
The PCIP will cover a broad range of health benefits, including primary and specialty care, hospital care, and prescription drugs. Eligibility is not based on income and a higher premium is not charged because of a medical condition. Participants will pay a premium that is not more than the standard individual health insurance premium in their state for insurance that covers major medical and prescription drug expenses with some cost-sharing.
Like the Children’s Health Insurance Program (CHIP), the PCIP provides states flexibility in how they run their program as long as basic requirements are met. Federal law establishes general eligibility, but state programs can vary on cost, benefits, and determination of pre-existing conditions. Funding for states is based on the same allocation formula as CHIP, and it will be reallocated if unspent by the states. Unlike CHIP, there is not a state matching requirement and the federal government will cover the entire cost of the plan.
HHS’ new consumer website (www.HealthCare.gov) provides information about how the plan is administered in each state. An informational pamphlet on the PCIP also is available on this website.