Health policy watchers could get ideas about how the new health insurance exchanges will work, or not work, by thinking about how exchange users might compare with the users of the Pre-Existing Condition Insurance Plan (PCIP) program.
Jean Hall, a health policy researcher at the University of Kansas, makes that case in a commentary published by the Commonwealth Fund.
The PCIP experience suggests that previously uninsured consumers who have just gotten health insurance may have a pent-up demand for high-cost care, but costs “should decline over time,” Hall wrote.
“The elimination of coverage exclusions on the basis of preexisting conditions and the availability of affordable, continuous coverage should help, as should spreading costs across the marketplaces’ broader risk pool,” Hall said.
The exchanges and PCIP
Drafters of the Patient Protection and Affordable Care Act (PPACA) added the health insurance exchange provisions in an effort to give individuals and small groups an easier way to buy high-quality health coverage.
Starting Oct. 1, PPACA exchange programs for individuals are supposed to help users shop for coverage from a menu that offers a number of high-quality plans that come with standardized benefit packages.
If the exchanges start up on schedule and work as expected, users will be able to buy the coverage on a guaranteed-issue basis. Health insurers will have only a limited ability to use age and other personal health information to set rates. The exchanges will help low-income users sign up for Medicaid and other government health programs, and they will help moderate-income users use new tax subsidies to buy private health coverage.
The drafters of PPACA included the PCIP provision in an effort to provide immediate relief for uninsured people with health problems.
PCIP offers comprehensive health coverage to people with health problems for a price similar to the price of ordinary individual commercial health coverage.
Eligibility is not based on income, and PCIP programs cannot charge higher rates for enrollees with more expensive health problems.