immediate improvements in the insurance market for americans over 50

DEPARTMENT OF HEALTH & HUMAN SERVICES-----------------------------------------------------------------------------------------------------------------Office of Consumer Information and Insurance Oversight

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Immediate Improvements in the Insurance Market for Americans over 50

The Early Retiree Reinsurance Program and the

Pre-existing Condition Insurance Plan

January 24, 2011

Richard Popper

Director, Office of Insurance Programs


Affordable Care Act Includes Many Advantages for Americans Ages 50+

• Improves access, coverage, and affordability for Americans ages 50+ – Closure of the Part D coverage gap– Coverage of preventive services in Medicare– Prohibition on annual and lifetime limits and pre-existing

condition exclusions (by 2014)

• Two programs provide immediate support to individuals, employers, and unions– Early Retiree Reinsurance Program– Pre-existing Condition Insurance Plan

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• Provides reimbursement to participating employment-based plans for a portion of the costs of health benefits for early retirees and early retirees’ spouses, surviving spouses, and dependents

• Available until 2014, when more comprehensive health insurance reforms take effect

• Affordable Care Act allocated $5 billion in program funding

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The Early Retiree Reinsurance Program (ERRP)

ERRP


Eligible Plan Sponsors

Employers and unions that offer employment-based health benefit plans to early retirees, their spouses, surviving spouses, and dependents•Sponsors can maintain plans directly (self-funded) or through an insurer

Eligible Early Retirees

• Age 55 or older;• Not eligible for coverage under Medicare; • Not active employees of the employer sponsoring

or contributing to the eligible plan; and• Enrolled for health benefits in a certified

employment-based plan.• Medicare enrollment status and age are irrelevant

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Eligible Plan Sponsors and Early Retirees

ERRP


Approved Sponsors Eligible for 80% Reimbursement of Allowable Costs

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• Program reimburses 80% of claims costs for each early retiree (or early retiree's spouse, surviving spouse or dependent), for claims incurred for that individual between $15,000 and $90,000 during a plan year, and paid

• Sponsors can receive credit/reimbursement toward the cost threshold for claims payments made by the insurer or health plan, as applicable, and by the early retiree and early retiree’s spouse, surviving spouse, or dependent

ERRP


Sponsors Must Use Reimbursements to Reduce Plan or Enrollee Costs

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An ERRP sponsor may use program reimbursements only to:

√ reduce the sponsor’s health benefit premiums or health benefit costs;

√ reduce health benefit premium contributions, copayments, deductibles, coinsurance, or other out-of-pocket costs for plan participants; or

√ reduce any combination of these costs.

ERRP

Sponsors may not use program reimbursements as general revenue


Variety of Employers Are Participating in ERRP• Over 6,500 sponsors have submitted applications to

ERRP; of these, more than 5,000 have been approved• Plan sponsors include Fortune 500 companies, state and

local governments, non-profit organizations, educational institutions, unions, and religious organizations

• More information is available at http://www.errp.gov

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ERRP


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Overview of the Pre-Existing Condition Insurance Plan (PCIP)

• Provides immediate, comprehensive coverage for individuals with pre-existing conditions until the Health Insurance Exchanges are available in 2014– Law required establishment within 90 days of enactment

• In order to qualify for PCIP, an individual must:– Be a U.S. citizen or residing in the U.S. legally;– Have been uninsured for a minimum of 6 months before

applying to PCIP; and – Have a pre-existing condition or have been denied

coverage because of a health condition

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PCIP


PCIP Offers Comprehensive Benefits…• Care in medical offices for treatment of illness or injury• Emergency services• Inpatient and outpatient hospital services• Inpatient and outpatient mental health and substance

abuse services• Prescription drugs• Home health care and hospice services• Outpatient laboratory and diagnostic services

PCIP


…and Important Features for Consumers

• First-dollar coverage for preventive care• No lifetime maximum on the amount the plan pays for

enrollee’s care• Benefits are available immediately when coverage

begins, even for pre-existing conditions• The ability to receive benefits at any qualified provider

PCIP


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2011 Plan Options and Out-of-Pocket Costs

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Beneficiary Responsibilities

Standard Option

Extended Option

HSA-eligible Option

State Plans

Monthly premium $116 - $626 $156 - $842 $121 - $650 $69 - $1,806

Medical deductible $2,000 $1,000 $2,500 $0 - $5,000

Drug deductible $500 $250 Incl. in medical

$100 - $500 or incl.

Out-of-pocket limit $5,950 $5,950 $5,950 $5,950

NOTE: All deductible and copayment amounts are for in-network benefits.

As in commercial coverage, PCIP enrollees pay monthly premiums and deductibles for coverage

PCIP


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Where Consumers Can Find More Information

• Consumers interested in applying to PCIP may visit http://www.pcip.gov – Under “Select Your State,” consumers should click their state of

residence on the interactive map– Each page includes state-specific information

• Consumers may also request information by calling 1-866-717-5826 (TTY: 1-866-561-1604) – The Call Center is open from Monday – Friday

from 8 am – 11 pm EST

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PCIP


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Questions and Answers


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For more information on the Pre-existing Condition Insurance Plan, please visit http://www.pcip.gov

Richard [email protected]

Cara [email protected]

immediate improvements in the insurance market for americans over 50

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