The Department of Health and Human Services has unveiled a new Pre-Existing Condition Insurance Plan (PCIP) that will offer coverage to uninsured Americans who have been unable to obtain healthcare coverage because of pre-existing health conditions.
According to HHS Secretary Kathleen Sebelius, the PCIP will provide a new option for those who have been uninsured for at least six months, are unable to get health coverage because of a health condition and are a U.S. citizen or residing in the U.S. legally.
Congress mandated the PCIP – along with $5 billion in federal funding to support it – under the Affordable Care Act. The PCIP is a transitional program until 2014, at which time insurers will be banned from discriminating against adults with pre-existing conditions and individuals and small businesses will have access to more affordable private insurance choices through new competitive exchanges, Sebelius said. In 2014, members of Congress will also purchase their insurance through exchanges.
"For too long, Americans with pre-existing conditions have been locked out of our health insurance market," Sebelius said. "Today, the Pre-Existing Condition Insurance Plan gives them a new option – the same insurance coverage as a healthy individual if they've been uninsured for at least six months because of a medical condition. This program will provide people the help they need as the nation transitions to a more competitive and fair market place in 2014."
Jay Angoff, director of the Office of Consumer Information and Insurance Oversight (OCIIO), which will oversee the program, said the PCIP is modeled after the Children's Health Insurance Program and allows states the maximum flexibility if they chose to run the program.
Starting July 1, the national PCIP will be open to applicants in the 21 states where the HHS is operating the program, Angoff said. Other states will have the program up and running by August, he said.
Richard Popper, director of Insurance Programs at OCIIO, said the PICP is an important step in the implementation of the Affordable Care Act.
"We have been working closely with the states and other stakeholders to make sure this program reaches uninsured Americans struggling to find coverage due to a pre-existing condition," he said.
According to Popper, the PCIP will cover a broad range of health benefits, including primary and specialty care, hospital care and prescription drugs. The PCIP does not base eligibility on income and does not charge a higher premium because of a medical condition, he said.
Participants will pay a premium that is not more than the standard individual health insurance premium in their state for insurance that covers major medical and prescription drug expenses with some cost-sharing, according to Popper.
Twenty-nine states plus the District of Columbia have chosen to operate their own plans, according to the HHS. They are Alaska
, Arkansas, California, Colorado, Connecticut, District of Columbia, Illinois, Iowa, Kansas, Maine, Maryland, Michigan, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia and Wisconsin.According to HHS, the other 21 states have elected to have the HHS run their plan.