PPACA: Federal PCIP Axes Broker Fee

The Centers for Medicare & Medicaid Services (CMS) is eliminating a $100 broker referral program aimed at brokers who help consumers enroll in the federal Pre-existing Condition Insurance Plan (PCIP).

The Government Employees Health Association (GEHA), Lee’s Summit, Mo., the cooperative insurer administering PCIP for CMS in states that are letting CMS provide PCIP services, told brokers about the change last week in an electronic mail massage.

“We are writing to thank you for the extraordinary efforts you have made in helping to increase awareness of and enrollment in the PCIP program,” GEHA says in the e-mail. “We have determined that our outreach efforts have succeeded in significantly raising awareness of PCIP and enrollment in this program. As such, CMS will end the PCIP Broker Referral Payment Program in federally administered PCIP states May 1, 2012.”

CMS announced plans to add the $100 PCIP referral fee program in May 2011.

Congress put the PCIP program in the Patient Protection and Affordable Care Act of 2010 (PPACA) in an effort to provide immediate relief for uninsured people with health problems. PCIP is meant to help fill the gap between the date PPACA was signed in March 2010 and the day when insurers are supposed to start selling subsidized coverage on a guaranteed issue, mostly community-rated basis in 2014.

PCIP provides comprehensive health coverage for people who have a hard time qualifying to buy ordinary individual commercial health coverage.

Eligibility is not based on income. The price of coverage is supposed to be comparable to what healthy people would pay for health coverage purchased through the conventional market.

To avoid crowding out private health coverage, Congress required that people with health problems be uninsured for at least 6 months before applying for PCIP.

Congress let states choose between running PCIP risk pools themselves or letting the parent of CMS, the U.S. Department of Health and Human Services (HHS) provide PCIP risk pool services for residents. The federal Office of Personnel Management (OPM) helped HHS hire GEHA to take charge of administration.

GEHA is now providing PCIP services for 23 states and the District of Columbia; 27 states are running their own PCIP programs.

Program critics originally predicted that millions of uninsured Americans with health problems would rush to enroll in the program and quickly use up federal PCIP funding.

Early on, enrollment was much slower than expected. CMS and GEHA added the broker referral fee in an effort to boost enrollment.