HHS makes preexisting condition coverage more accessible

Washington -- The Dept. of Health and Human Services is trying to increase enrollment in a temporary insurance program for people with preexisting medical conditions by reducing premiums and easing application requirements.

HHS announced on May 31 that an applicant for the Preexisting Condition Insurance Plan will be able to qualify in part by submitting a letter from a physician, physician assistant or nurse practitioner stating that the patient has or has had a preexisting medical condition, disability or illness. The department previously had required PCIP applicants to submit a letter of denial from a health plan before qualifying.

HHS runs the special plan in 23 states and the District of Columbia. The other 27 states run their own federally funded PCIPs.

HHS also is lowering plan premiums by up to 40% in 18 states and notifying other states that they can enact similar premium reductions. The application and premium changes will take effect on July 1.

"Reducing premiums and easing the application process will make it much easier for uninsured individuals to obtain insurance through this critically needed program," said American Medical Association President Cecil B. Wilson, MD.

The national health system reform law created PCIP to provide coverage to people denied access to health insurance until 2014, the year the law bans all preexisting condition exclusions in health plans. Total plan enrollment was expected to hit the hundreds of thousands, but as of the end of March, only about 18,000 people nationwide had signed up.

Despite the new policy changes, applicants still must be uninsured for at least six months to qualify for PCIP because the health reform law specifies that requirement.

Premiums and enrollment policies vary in the 27 states running their own PCIPs. New Jersey, for example, set rates to match the local nongroup market when it created the high-risk plan last August. New Jersey also never required applicants to obtain a rejection letter from a health plan, said Marshall McKnight, spokesman for the New Jersey Dept. of Banking and Insurance, which runs the state's PCIP. Approximately 500 people had enrolled in the New Jersey plan as of April 30.

Administrators of Michigan's plan said they will work with HHS to streamline the enrollment process and reduce its premiums. "This is welcome news," said Scott Wilkerson, president and CEO of Physicians Health Plan of Mid-Michigan, which administers HIP Michigan, the state's PCIP. The plan has approximately 350 enrollees.

This fall, HHS will try to increase PCIP enrollment further by paying agents and brokers to connect eligible applicants with the program. Several states successfully have spurred enrollment with such payments, according to the department.

More information about the preexisting plans is available online (link).