Only 8,000 enroll in health plan for preexisting conditions

Because many patients and physicians don't know about the program, some states are reaching out to advocacy groups that serve people with chronic conditions.

By Geri Aston — Posted Dec. 27, 2010

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A new nationwide effort to provide health coverage to uninsured Americans with preexisting conditions is off to a slow start, largely due to high costs and a lack of awareness.

As of Nov. 1, only 8,011 people were enrolled in the Pre-Existing Condition Insurance Plan, numbers from the Dept. of Health and Human Services show.

People who have been denied coverage by private insurers because of a preexisting condition and who have been uninsured for at least six months are eligible to participate in PCIP. The idea is to give patients who have no access to private coverage because of their condition a way to get insurance while they wait for the state-based health insurance exchanges to launch in 2014.

Almost 6 million Americans are potentially eligible for the program, which runs through 2013, according to a report published in October by The Commonwealth Fund. However, because the $5 billion in federal funding designated by the law won't be enough to cover all eligible individuals, the Congressional Budget Office projects enrollment will average 200,000 a year between 2011 and 2013.

The PCIP is administered by either individual states or the federal government. Twenty-three states and the District of Columbia decided to let the federal government oversee their programs. People in those areas began signing up July 1. The remaining 27 states chose to administer their own programs. Their start dates varied, but all plans are up and running.

Enrollment varies

Enrollment numbers vary widely by state due to a combination of factors, including differences in PCIP costs, the number of uninsured people and the insurance terrain for high-risk individuals in each state, said Jean Hall, PhD, associate research professor at the University of Kansas Center for Research on Learning's Division of Adult Studies.

Pennsylvania, which manages its own program, had the highest enrollment, with 1,657 people as of Nov. 1. By contrast, no one had enrolled in the federally administered PCIP in the District of Columbia, and one person joined the federally administered program in North Dakota.

Nationally, the numbers are lower than expected primarily because most consumers don't know the program exists, Dr. Hall said. That could change because some states are beginning to reach out to advocacy groups that serve people with chronic conditions, said Dr. Hall, a co-author of the Commonwealth Fund report. Alerting people who might qualify for the insurance worked in Pennsylvania, she said. The state sent a letter to people on the waiting list for its adultBasic, a state-managed insurance program for people who have gone without coverage for 90 days.

Many physicians also aren't aware of the program, said Dennis Olmstead, chief economist and vice president of practice economics and payer relations at the Pennsylvania Medical Society. The society has included information about the program in its newsletters. If doctors or their front office staff know of patients with preexisting conditions who are uninsured, they could notify them of the PCIP option, Olmstead and Dr. Hall said.

A question of cost

Another reason for the slow start is the coverage costs. Premiums reflect standard individual market rates in each state. This makes them less expensive than typical state high-risk insurance pool coverage, but still pricey.

For example, in states where the federal government provides coverage, the monthly premium for a 50-year-old enrollee ranges from $320 to $570, according to HHS. Premiums and deductibles in state-administered programs vary widely. The health reform law caps out-of-pocket expenses at $5,950 a year for individuals.

"Affordability is an issue, because really what this does is give people access to the individual market, and the individual market is expensive," Dr. Hall said. "You have to look at it as a stopgap for people that can afford it. It's a good bridge to the exchange coverage."

Some states, including Pennsylvania and New York, set premiums below the standard rate to make the program more affordable, Dr. Hall said. She expects more states to do so in the coming year to entice people to sign up. "They're trying to respond to what they've been hearing as far as why people aren't enrolling."

The federal government is making changes to try to attract more people to the program. Now, only one coverage option, the Standard Plan, is available in states where the federal government runs the PCIP. It has a single medical and pharmacy deductible of $2,500. The 2011 Standard Plan will have two deductibles -- a $2,000 medical deductible and a $500 prescription drug deductible. Premiums will be almost 20% lower than 2010 levels.

In addition, two new plan options will be available in states with federally administered PCIPs. One is the Extended Plan, which will have a $1,000 medical deductible and a $250 drug deductible. Its premiums will be slightly higher than 2010 levels. The other is a health savings account, which will have a $2,500 deductible but premiums that are 16% less than 2010 levels.

The changes are a positive development, especially the lower prescription drug deductibles in the Standard and Extended plans, Dr. Hall said. Most states offer only one plan, but Dr. Hall expects some of those programs to follow the government's lead and offer new options in 2011.

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External links

U.S. government's Pre-existing Condition Insurance Plan (link)

"Realizing Health Reform's Potential: Pre-Existing Condition Insurance Plans Created by the Affordable Care Act of 2010," Commonwealth Fund, Oct. 4 (link)

Congressional Budget Office letter regarding the PCIP, June 21 (link)

"Health Policy Brief: Pre-Existing Condition Insurance Plan," Health Affairs, Aug. 10 with a Nov. 30 update (link)

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