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PCIP: Illinois Warns Against Pool Hopping

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The new Pre-existing Condition Insurance Plan (PCIP) may be cheaper than the existing Illinois risk pool, but switching programs is a bad idea, officials say.

The Illinois Department of Insurance and the Washington Insurance Commissioner Mike Kreidler have come out with new advice about the PCIP program, and Illinois officials are especially blunt their guidance, which is formatted as a collection of answers to frequently asked questions about the PCIP program.

The federal Affordable Care Act (ACA) – the legislative package that includes the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act – provided $5 billion in PCIP funding to fill in coverage gaps for uninsured people with health problems before a ban on medical underwriting takes effect in 2014.

The District of Columbia and 29 states decided to run their own risk pool plans, and 21 states have decided to leave risk pool coverage in the hands of HHS officials.

Many states already have risk pool programs to provide coverage for residents who are not considered to be healthy enough to buy conventional individual health insurance in those jurisdictions.

Illinois has been running the Illinois Comprehensive Health Insurance Plan (ICHIP) risk pool since the late 1980s.

State law requires ICHIP premiums to be at least 125% of the standard rate and not more than 150% of the standard rate. “Illinois law requires that premiums be based on sex, age, geography, and specific benefit plan,” officials say.

Illinois expects to get about $196 million in federal PCIP funding, and it is hoping it can use that funding to provide risk pool coverage for 4,000 to 6,000 additional individuals, officials say.

“Variables that impact how many people can enroll include (1) the severity of the illnesses of those who enroll, (2) the benefit structure, and (3) the length of the coverage term,” officials say.

The ACA PCIP provisions require PCIP premiums to be comparable to commercial premiums, and age, geographic location and tobacco use are the only factors that a PCIP program can use when setting rates, officials say. For PCIP enrollees, the rate for the oldest enrollees can only be 4 times as high as the rate for the youngest enrollees.

To qualify for PCIP coverage, an Illinois resident must have a preexisting condition and go without health coverage for 6 months.

Illinois officials address the following question:

“If I’m currently enrolled in ICHIP, should I disenroll and be uninsured for 6 months so that I can be eligible for the THRP, which is less expensive?”

“No,” Illinois officials say.

Illinois PCIP managers may have to close PCIP enrollment if demand exceeds funding, officials warn.

“You may not even be eligible to join the waiting list until you have been uninsured for 6 months,” officials say.

When ICHIP has the capacity to enroll new enrollees, it does not require that the new enrollees be uninsured. But Illinois law prevents someone who voluntarily disenrolls from ICHIP from re-enrolling for 12 months following disenrollment,” officials say. “In other words, if you are unable to enroll in the [PCIP], you may lose access to coverage for more than 6 months.”

The Illinois department also is asking consumers for help with finding out what preexisting conditions ought to qualify residents to join the PCIP program.

The ICHIP presumptive condition list is at

“If you have a condition for which a health insurance company has denied coverage to you, please notify the department so that we can determine whether that condition satisfies the criteria of the Affordable Care Act,” officials say. “The department is interested in learning the condition(s) for which you have been denied coverage by a health insurance company.”

Washington state reports in its PCIP guidance that the Washington State Health Insurance Pool will run that state’s PCIP program alongside the state’s current high-risk pool.

Applications will be available in early August, and coverage will start Sept. 1, officials say.


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