Affordable Care Act
Preexisting Conditions
Preexisting Condition Insurance Plans
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How will the new Preexisting Condition Insurance Plan work and when will it be available?
A temporary national Preexisting Condition Insurance Plan was established July 1, 2010. Up to $5 billion in federal funding will be provided to cover those who have been denied coverage due to a preexisting condition and who have been uninsured for at least six months prior to applying for enrollment. The secretary of the Department of Health and Human Services (HHS) will determine the benefits that must be included and is considering establishing a minimum standard. HHS will also determine what qualifies as a “preexisting condition.”
While some states have elected to let HHS handle the creation of their Preexisting Condition Insurance Plan (PCIP), California has established its own PCIP. For information about California’s PCIP, visit www.pcip.ca.gov/Home/default.aspx, or, consult the state Department of Insurance www.naic.org/state_web_map.htm.
Those interested in applying for coverage should gather copies of their medical records to demonstrate they have a preexisting condition (it must be one specified by the HHS secretary or the state) and apply as soon as the state or federal government starts accepting applications. You will also need proof of a denial of coverage, or that coverage was offered only with an exclusionary rider.
People already enrolled in a state risk pool will maintain their coverage and won’t be able to enroll in the new PCIP. The new federal funding will allow existing state plans to cover more people.
The Preexisting Condition Insurance Plan is temporary and will end January 1, 2014, when the health insurance exchanges are in place. Procedures will be developed to transition PCIP members to the exchange without gaps in coverage.
Will insurance through the new preexisting condition insurance plan be more affordable than through existing plans?
The new national preexisting condition insurance plan will make coverage more affordable; premiums may be 10%-40% less than those available through existing state preexisting condition insurance plans thanks to subsidies from the federal government and new rating restrictions: Premiums will be set for a standard population, not one with higher risk; premiums can only be adjusted for age (limited to a 4-to-1 ratio), geographic area, and family composition. Cost-sharing will be capped at HSA limits: $5,950 for individuals and $11,900 for families in 2010. Premium subsidies will also be available.
Other documents in the Preexisting Conditions section:
- Preexisting Condition Basics
- Preexisting Condition Insurance Plans
