pre-existing condition insurance plans (pcips) under the affordable care act of 2010 jean p. hall...
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Pre-existing Condition Insurance Plans (PCIPs)
under the Affordable Care Act of 2010
Jean P. Hall and Janice M. MooreUniversity of Kansas
Commonwealth WebinarOctober 7, 2010
Background on the PCIPs Included in PPACA legislation; to be implemented within 90
days of passage $5 billion total allocation Immediate availability of coverage for uninsured individuals
with pre-existing conditions; interim to Exchanges in 2014 Different from state high-risk pools:
No waiting period for coveragePremiums at standard rateOOP capped at $5,950Eligibility transferrable to other states
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Administration Overall, 27 states chose to administer their PCIPs:
20 out of 35 high-risk pool states 4 out of 5 open enrollment states 3 out of 5 guaranteed issue states 0 of 5 with no existing safety net programs
PCIPs for the other 23 states and the District of Columbia are federally administered
Presented an equity dilemma for states with existing high-risk pools because premiums are generally less for the PCIP coverage, but current state pool members can not switch
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State and federal pools
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Note: FL pool closed to new enrollment since 1991
PCIP potential enrollees Total potential pool as many as 6 million
based on uninsured and having at least one chronic condition
HHS cites various enrollment estimates ranging from 175,000 to 400,000.
PCIPs make individual market coverage available to people with pre-existing conditions
An average state high-risk pool enrollee incurs about $10,000 per year in claims
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Plan variability Other than basic stipulations, HHS gave
states a great deal of latitude in how to design their PCIP coverage—in part to accommodate existing laws/programs and in part due to the tight timeline
Many states with existing high-risk pools simply used one or more of those plans
The result is a great deal of variability in coverage and benefits from state to state
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PCIP premiums PCIP premiums may vary on age (4:1), tobacco use
(1.5:1), geographic area, and deductible Monthly premiums for a non-smoking 50-year-old
range from $240 for a $5000 deductible plan in UT to $1006 for a $1500 deductible plan in AK; flat premiums in PA and NY
For the same federally-administered plan, premiums range from $330 in HI to $556 in FL; $455 on average (uses a 2.1:1 age ratio)
Premiums are capped at market rate but can be lower
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Deductibles, cost-sharing, OOP Fifteen states offer plans with deductibles at or below
$1,000 The most common deductible is $2,500, but as high
as $5,000 Most use 20% co-insurance; 3 states use 30%; 1 uses
25% and 1 uses 15% PPACA ceiling for OOP is $5,950 in 2010, indexed to
HSAs; all federally-administered plans and many state plans use this as their limit
Washington and Maryland have the lowest in-network OOP limit at $1,500
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First dollar (or outside the deductible) coverage
Allows participants to access some services immediately without first meeting their deductible
Most commonly includes preventive care and prescriptions; some office visits with copays
May be especially important for people with multiple chronic conditions because large deductibles can create access barriers
A possible feature for plan enhancement
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Regulatory Impact Will produce savings by reducing mortality,
morbidity and medical expenditure risk while increasing worker productivity through reductions in absenteeism and low productivity due to illness.
Reduce cost-shifting for uncompensated care. Provides an important source of coverage for
some with pre-existing conditions until exchanges are implemented in 2014.
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