via AAPD (6.1.11):
Health Care Reform Implementation: Feds Announce Lower Rates for Health Insurance for People with Preexisting Conditions
By David Heymsfeld, Policy Advisor, AAPD
On May 31, AAPD attended a press conference at which the U.S. Secretary of Health and Human Services (HHS) Kathleen Sebelius announced significant reductions in premiums for insurance for persons with preexisting conditions. This insurance is provided under the new health care reform act (the Affordable Care Act, or ACA). Also announced were new standards of eligibility to make it easier to obtain the insurance. These changes should be very helpful to people with disabilities who may have difficulties in obtaining health insurance at reasonable prices because of preexisting conditions.
Background: The ACA established a federally funded program (the Preexisting Condition Insurance Program or PCIP) to offer health insurance at a reasonable cost to people who have been without insurance for six months and have been unable to get insurance because of a health condition. The PCIP program will be in effect between 2010 and 2014, at which time all health insurance will have to be open to people with preexisting conditions.
Under the PCIP program, states have the option of establishing their own programs (twenty-seven states do so) or letting the federal government establish the program (twenty-three states and the District of Columbia do so). In both cases individuals purchasing the insurance must pay premiums comparable to those charged for regular policies in the state. Federal funding is available to cover costs beyond those covered by the premiums.
PCIP Program Status: To date, the program has had only limited effectiveness as in the first year only 18,000 people have purchased this insurance. The Congressional Budget Office had estimated that there would be 200,000 enrollees by 2013. A major problem appears to be the high cost of premiums that people must pay for the insurance in many states.
Reductions in Premiums: Under PCIP the premiums are established on a state-by-state basis, to be comparable to the costs of insurance in that state. The May 31, 2011 reductions were designed to bring each state’s PCIP premiums closer to market rates. The reductions are as high as 40% in some states, and lower in other states. For example, in Florida where the reduction will be 40%, the monthly premium for a standard plan for a person over 55 will drop from $526 to $376.
In six states there are no reductions, because these states are already at market rates. The HHS action only dealt with the twenty-three states with programs run by the federal government. The states that run their own programs are being encouraged to take similar action. Specific information on each state may be found at http://www.HealthCare.gov/news/factsheets/pcip05312011a.html.
No Letter of Denial Now Needed: The other change is that applicants for PCIP will no longer need to submit a letter of denial from an insurance company. Under the new requirements applicants will be able to submit a letter from a medical professional stating that they have a pre-existing condition.
Advocacy Steps
1. If you are currently uninsured because of a pre-existing condition, contact your state’s PCIP to enroll. To contact the plan in your state, go to https://www.pcip.gov/StatePlans.html
2. Work to educate residents of your state of any reduction in premiums in your state.
2. If your state is one that runs its own program, encourage the state to reduce premiums under the new federal guidelines. For a list of the states which run their own programs, see https://www.pcip.gov/StatePlans.html
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