WASHINGTON (AP) — Thousands of people with serious medical problems are in danger of losing Pre-existing Condition Insurance Plan (PCIP) coverage because of cost overruns, state officials say.
The drafters of the Patient Protection and Affordable Care Act (PPACA) created PCIP — which is often pronounced “pee-sip” — to serve as transition program for the so-called “uninsurables” — people with serious medical conditions who can’t get coverage elsewhere.
The program was supposed to help uninsurable people bridge the gap from day PPACA was signed into law in March 2010 until Jan. 1, 2014, when PPACA will prohibit health insurers from taking health problems into account when deciding whether to accept applicants.
About 100,000 people now have PCIP coverage. The people in a state’s plan pay premiums comparable to the premiums that commercial insurers in the state charge healthy enrollees.
In a letter this week to Health and Human Services Secretary (HHS) Kathleen Sebelius, state officials said they were “blindsided” and “very disappointed” by a federal proposal that they contend would shift the risk for cost overruns to the states in the waning days of the program.
“We are concerned about what will become of our high risk members’ access to this decent and affordable coverage,” wrote Michael Keough, chairman of the National Association of State Comprehensive Health Insurance Plans. States and local nonprofits administer the program in 27 states, and the federal government runs the remaining plans.
“Enrollees also appear to be at risk of increases in both premiums and out-of-pocket costs that may make continued enrollment cost prohibitive,” added Keough, who runs North Carolina’s program. He warned of “large-scale enrollee terminations at this critical transition time.”
The crisis is surfacing at a politically awkward time for the Obama administration, which is trying to persuade states to embrace a major expansion of Medicaid under PPACA. It may undercut one of the main arguments proponents of the expansion are making: that Washington is a reliable financial partner.
The root of the problem is that PPACA capped spending on the program at $5 billion, and the money is running out.