Health Insurance News

Trying to spur enrollment in a key new benefit of the 2010 health law, the Obama administration announced today it is slashing premiums for new high-risk insurance plans and no longer requiring applicants to submit a rejection letter from private insurers.

PCIP (or Pre-Exisiting Conditions Insurance Plan) has finally become affordable.  The initial enrollment was 18,000 in the first year!  People just couldn’t afford it.  Whats amazing is that there are minimally 4 million Americans that are running around with no insurance that are eligible for this plan which is simply awesome.  How awesome?  Well the government expected a huge influx of clients and set aside $5 billion to fund the shortfall between premiums collected and health care dollars spent.  The plan anticipated that the $5 billion shortfall would cover 200,000 enrollments.

So what happened?  Agents!  No agents to tell people where and how to sign up because insurance agents are greedy bastards and will sell you a mini-med that could kill you before they let you leave without getting a commission.  Perhaps the government should have set aside some money to pay a minimal fee to agents to do this work (kind of like Citizen’s in Florida does for property insurance).  The good news is that our website carriers this plan (you can even enroll online) and the even better news is that the government cut the rates almost in half!

Twenty-seven states run their own plans; the federal government operates them in 23 states and the District of Columbia. The changes, which occur July 1, affect only federally run plans. So if your own state decided to administer its plan you will not enjoy this rate cut unless they match it.

These full benefit plans were made to help people get insurance if they were uninsurable between now and 2014 when insurers will be forced to accept everyone and everyone will be forced to have insurance.  Of course there are some caveats such as in order to be eligible for the plan, applicants have to be uninsured for at least six months and have a pre-existing condition.  But on the other hand, from now on a simple letter from the doctor confirming a chronic or uninsurable condition will suffice to secure coverage.

Our chart below shows the premium drops where in some states it will be 40% (like Florida) plus the District where the federally administered plans operates, the administration estimates. These decreases will help bring premiums closer to the rates in each state’s individual insurance market. In the six states where high-risk plan premiums were already similar to what healthy people pay for individual plans, premiums will remain the same.

States that will see a 40 percent drop in premiums are Alabama, Arizona, Delaware, Florida, Kentucky and Virginia. In other states, premium reductions range from 2.1 percent in Mississippi to 38.3 percent in Minnesota.

In Florida, where 770 people have enrolled, a person 55 and over who subscribes to the so-called standard plan will see his or her monthly premium for the standard plan fall by $150 to $376.  Let me tell you something about that premium too, its awesome!  Wrap it up and tie a bow around it as it really kicks butt.

To further generate interest in the plans, HHS this fall will finally accept my advice and begin paying insurance agents and brokers for signing up people though probably only in states where the plan is administered federally.

“These changes will decrease costs and help insure more Americans,” said Health and Human Services Secretary Kathleen Sebelius.

One critic of the program again took the administration to task.

“It seems a fairly safe assumption that today’s announcement is an effort to jump-start a program that has not come close to meeting expectations,” said a spokesman for Rep. Fred Upton, R-Mich., chairman of the Energy and Commerce Committee. “However, additional information is needed to determine the ramifications of this change – both for taxpayers and Americans with pre-existing conditions who may or may not benefit from this program.”