HHS: 18 states to drop PCIP programs

COLUMBUS, Ohio (AP) — Eighteen states have decided to turn their state Pre-existing Condition Insurance Plan (PCIP) programs over to the U.S. Department of Health and Human Services (HHS), HHS officials said Tuesday.

HHS officials have asked states with state-based PCIP programs to accept a fixed, lower-than-expected budget allocation for the rest of the year or else shut down the state-based programs and put the enrollees in the federal PCIP program.

PCIP program managers in nine states seem to be inclined to accept the new HHS PCIP contract terms.

PCIP continues to provide important coverage to those with few alternatives, an HHS spokesman said Tuesday in comments about the program changes.

“These actions will help ensure the program’s smooth transition to 2014, when the new market reforms will be implemented and insurance companies will no longer be able to deny coverage because of pre-existing conditions,” said agency spokesman Fabien Levy.

An industry group, the National Association of State Comprehensive Health Insurance Plans, said in a letter to HHS that it fears “catastrophic disruption of coverage” for PCIP program enrollees.

Officials in Ohio, one of the states that will be putting enrollees in a state-based PCIP program in the federal program, estimated that HHS had offered it about $12 million less funding that their program needs to maintain current benefit levels.

Mary Taylor, the Ohio insurance commissioner, wrote in a letter to HHS Secretary Kathleen Sebelius that she has concerns about the effects of the changes on the quality of coverage as well as state finances.

“Changes to benefits, treatment plans, deductibles, access to provider networks, and a potential lapse in coverage later in 2013 could harm consumers relying on the high-risk pool for their health care needs,” Taylor wrote.

PCIP (pronounced “P-sip”) is part of the Patient Protection and Affordable Care Act of 2010 (PPACA). The program provides subsidized health insurance for uninsured people who are not healthy enough to qualify for conventional, medically underwritten coverage. Many of the enrollees have conditions such as cancer or severe heart disease.

Enrollees pay premiums comparable to the premiums that healthy people pay for individual coverage in the commercial coverage.