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White House Relaxes PCIP Requirements to Kick-Start Enrollments

 |  By Margaret@example.com  
   June 01, 2011

With enrollment in the Pre-Existing Condition Insurance Plan lagging well behind original estimates, the Obama administration Tuesday announced steps to lower premiums and increase enrollment in the high-risk insurance plans. And, to generate program interest among agents and brokers, payments will be made for successfully connecting eligible people with PCIPs.

Effective July 1, premium costs for the Pre-Existing Condition Insurance Plan will drop by between 2% and 40% in the 23 states and the District of Columbia where the PCIP program is federally administered. In addition, to qualify for the program applicants will only need to produce a physician's letter dated within the past 12 months, stating that the applicant has had a medical condition, disability or illness.

Applicants still need to have been uninsured for six months. Previously, applicants for the PCIP program needed a letter of coverage denial from an insurance company in addition to having been uninsured for six months.

When the $5 billion PCIP program was introduced in 2010 it was envisioned as a stop-gap measure to provide people with pre-existing conditions with access to affordable health insurance.  Those people are often rejected by health plans.  The temporary program will exist only until 2014 when insurers will no longer be able to deny coverage to people with pre-existing conditions.

The Congressional Budget Office estimated that about four million uninsured would be eligible for the $5 billion program and that 200,000 would be enrolled by 2013.

Instead, PCIPs had attracted only 18,313 enrollees as of March 31, 2011, according to the Department of Health and Human Services.

The goal of the premium reduction is to bring PCIP costs in line with private individual insurance. In Florida, state officials expect the premium reductions to attract new interest in the PCIPs. "We have a significant population on fixed incomes," explained Jerome Ashford, executive director of the Florida Comprehensive Health Association, which is responsible for the state's high-risk insurance program. That program has been closed to new enrollees since 1992.

The federal program in Florida was launched last fall and had 770 enrollees as of March 31, 2011. Florida is one of seven states expected to see premiums fall by 40%. That will mean beginning July 1 an enrollee aged 55 or older will pay $376 per month for insurance versus $626 before the reduction

Alabama, Arizona, Delaware, Florida, Kentucky and Virginia will also see a 40 percent drop in premiums. In other states, premium reductions will range from 2.1 percent in Mississippi to 38.3 percent in Minnesota.

Ashford is not sure how paying agents and brokers will affect PCIP enrollment. "It probably will depend on the payment and we don't know how that will be calculated."

"The Pre-Existing Condition Insurance Plan changes lives, and in many cases, literally saves lives," said HHS Secretary Kathleen Sebelius. "These changes will decrease costs and help insure more Americans." This chart details the state changes.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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