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Guest Article
(From the June 25, 2012 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)
PCIP Enrollment Evidences Deep Need for Healthcare by Adults with Pre-Existing Conditions
Established by the Patient Protection and Affordable Care Act, the Pre-Existing Condition Insurance Plan (PCIP) program enables adults with serious health conditions to obtain health coverage at the same premium rates that healthy people pay in the individual market. PCIP coverage is meant to serve as a bridge until 2014, when the Act's state exchanges are set to become effective and insurers will no longer be permitted to base premium amounts on—or to refuse coverage because of—an individual's preexisting condition or health status. Children under age 19 are already protected from discrimination based on pre-existing conditions.
To be eligible for PCIP coverage an individual must: (1) be a U.S. citizen or reside in the U.S. legally, (2) have a pre-existing condition or have been denied health coverage due to a health condition, and (3) have been uninsured for at least 6 months. Each state elects whether the state or the federal government will administer its PCIP program. A recent release on Healthcare.gov discloses that 27 states have chosen to run their own program while 23 states and the District of Columbia have elected to have their PCIP run by the federal government. The Act appropriated $5 billion in federal funds to support the PCIP program (i.e. to supplement premium contributions) during its duration from July 1, 2010 until January 1, 2014.
A recent report on the PCIP program reveals the deep need for such coverage, and the striking difference in health care utilization between PCIP participants and those in established plans. According to the report, the top 5 diagnoses or procedures in terms of cost tend to include cancers, ischemic heart disease, degenerative bone diseases, organ failure requiring a transplant, and hemophilia. These illnesses are prevalent among the PCIP enrollees, with the federally-administered PCIP program in 2011 serving 628 enrollees with cancer and more than 1,000 enrollees with either ischemic heart disease or heart failure.
Illustrative of the need for care by the PCIP enrollees is a comparison between enrollees in the federally administered PCIP and those in an established health plan in the Federal Employees Health Benefits plan. The comparison showed that PCIP enrollees had:
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A comparison between the highest-cost enrollees in both plans was even more striking, showing that the PCIP enrollees had:
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Who are the enrollees in the PCIP? As the report explains:
PCIP is available to provide care for the sickest, most vulnerable uninsured Americans. This is a uniquely high-cost population for several reasons. By definition, enrollees must have a pre-existing health condition. They are also more likely than most to need ongoing, potentially expensive care for that condition. As enrollees must have been uninsured for at least six months, they are likely to have delayed or deferred care for that condition— which may have caused their condition to worsen and results in an immediate need for care when the patient receives insurance. |
Between August 2011 and November 2011 (the most recent months covered by the report) approximately 8,000 new applications were received each month for PCIP coverage (with about half being submitted to the federally-administered PCIP). The largest segment of enrollees is age 45 and older, representing people who have left the workforce, have no employer-sponsored healthcare and are not yet eligible for Medicare.
The Department of Health and Human Services proposes to allocate the $5 billion to the states using a formula akin to the Children's Health Insurance Program (i.e., based on factors such as the nonelderly population, the nonelderly uninsured and geographic costs). As with CHIP, the allotments will be reallocated after a period of time based on the states' actual enrollment and expenditure experience. The estimated allotments are available on the CMS website and roughly align with the level of enrollment for the states. The three highest enrollment states (for April 2012) are also the three highest allotment states: California, Florida and Texas. More information on the PCIP is available on the PCIP webpage on Healthcare.gov.
| The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations.
If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Erinn Madden 202.220.2692, Bart Massey 202.220.2104, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955. Copyright 2012, Deloitte. |
BenefitsLink is an independent national employee benefits information provider, not formally affiliated with the firms and companies who kindly provide much of the content and advertisements published on this Web site, including the article shown above. |