Insurers and employers will be very, very sorry if they dump people with health problems into the new Pre-existing Condition Insurance Plan (PCIP) programs.
The Office of Consumer Information and Insurance Oversight (OCCI), a new arm of the U.S. Department of Health and Human Services (HHS), made that point today in the preamble to an interim final rule implementing Section 1101 of Title I of the Patient Protection and Affordable Care Act (PPACA).
The section, part of the Affordable Care Act package, requires the OCIIO to work with the states to set up a temporary PCIP system to help tide uninsured people with health problems over until 2014, when a ban on use of personal health information in underwriting and pricing health coverage is set to take effect, and HHS and state governments are supposed to make standardized, subsidized health coverage available through a new health insurance exchange system.
OCIIO officials say in the preamble to the interim final rule that they decided to create an interim rule, rather than going through the full comment process needed to create a permanent rule, because Congress wanted states to set up PCIP programs as quickly as possible. The OCIIO will be accepting and reviewing comments on the interim rule while implementation is under way. Comments are due Sept. 28.
States are supposed to make PCIP coverage available to residents with pre-existing conditions who have been uninsured for at least 6 months. Rates are supposed to be comparable to the standard rates in a given market. Program managers can make premiums for the oldest insureds 4 times as high as the rates for the youngest insureds, but they cannot impose pre-existing condition exclusions.
Congress provided $5 billion in funding for program subsidies; experts question whether that amount will be enough to make PCIP coverage available to many high-risk uninsured people.
Part of the new interim rule concerns definitions.
Officials have decided, for example, that the term “pre-existing condition exclusion” “refers to a denial of coverage, or limitation or exclusion of benefits, based on the fact that the individual denied coverage or benefits had a health condition that was present before the date of enrollment for the coverage (or a denial of enrollment), whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date,” officials write in the preamble to the PCIP interim final rule, which appeared today in the Federal Register. “This would include exclusions stemming from a condition identified via a pre-enrollment questionnaire or physical examination, or the review of medical records during the preenrollment period.”
Insurers sometimes refuse to take applications from consumers with health problems, and the new rule means consumers can get PCIP coverage even if insurers have not formally rejected their applications, officials say.
States can work with HHS to fine-tune their criteria for deciding which applicants do and do not have pre-existing conditions.
OCIIO officials acknowledge in the preamble that PCIP funding might run out.
“Given the capped appropriation for this program, we