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Average PCIP enrollee cost: $32,108 per year

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Insuring some enrollees in the Pre-existing Condition Insurance Plan (PCIP) program — a government health insurance program for people with serious health problems — is extremely expensive.

Officials at the Center for Consumer Information and Insurance Oversight (CCIIO), the agency that oversees implementation of the PCIP program for the federal Centers for Medicare & Medicaid Services (CMS), talk about the claims cost challenges in a report posted on the CCIIO website.

The medical costs for the 134,708 enrollees averaged $32,108 in 2012, with a range of $4,276 per enrollee in the cheapest state to $171,909 per enrollee in the most expensive state, officials said.

When analysts looked at a year of PCIP claims, they found that two-thirds of the enrollees each had total claims for the year that were under $5,000.

But 4.4 percent of the enrollees accounted for half of the claims costs, and those enrollees had average expenses of about $225,000, officials said.

The costs were so high in part because many enrollees are extremely sick, with 694 having diagnoses of heart failure and about 2,200 facing cancer, officials said.

Drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created the PCIP program in an effort to provide temporary relief for individuals with health problems who live in states that allow medical underwriting.  

PCIP provides health coverage for a price close to a state’s typical commercial rate for individuals who have serious health problems and have been without health insurance for at least six months.

The federal government is running the PCIP program in 23 states and the District of Columbia. State governments are running PCIP programs for their own residents in 27 states.

CMS recently announced that it was suspending new enrollments in the federal PCIP programs and phasing out enrollment in the state PCIP programs by March 2.

“Audits are under way and will encompass all 27 state PCIP programs and the federally administered PCIP by the end of 2014,” officials said. “Core compliance areas included in the audits are program enrollment and disenrollment, premium billing, eligibility and benefit coverage, appeals, finances of the risk pool, and medical and pharmaceutical claims payments and payment safeguards.”

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