PCIP was a godsend for East Coast Health Insurance and its clients. The Pre-Existing Condition Insurance Plan made health insurance available to people who had a problem getting insurance due to a preexisting condition.
The Pre-Existing Condition Insurance Plan, PCIP, was established in June 2010 by the Patient Protection and Affordable Care Act, in order to provide medical coverage to individuals who normally would be rejected by health insurance companies due to their health. Pre-existing conditions have been viewed as an extra expense for insurers to deliberately avoid, and therefore the ACA brought this new option into the open for those who were stuck with an illness and no way to pay for treatment.
PCIP was operated by the Department of Health and Human Services (HHS) or by an individual state. There were 27 state-run and 24 HHS-run PCIPs. This temporary high-risk pool program was created to give coverage to people who have been uninsured for at least six months and have a qualifying condition, or had been denied a plan as a result of their illness. As every state and the HHS chose to operate differently, each state PCIP program had its own set of premium rates, deductibles, and out-of-pocket limits. Specific region also dictated rate variability.
PCIP closely resembled a basic individual health plan, like a PPO, for a healthy beneficiary than like Medicaid or a discount program. Rates were generally affordable and similar to a low-cost private health insurance policy in most cases, though in some areas, premiums were rather steep.
PCIP included monthly premiums and an annual deductible to cover major medical (hospital, physician) and prescription costs. There was also cost sharing like a private plan, as services were available for set copayments and percentages of coinsurance, though there were set limits for out-of-pocket expenses. The plans did not increase premiums based on their health, as an insurance company would, operating as the system does now.
Hospital services were covered at 80% after deductible, and preventive care was covered in full with in-network providers under all three types of PCIP. Primary care and specialist office visits with an in-network physician cost a $25 copay for each visit.
Individuals who had pre-existing health conditions with any income level, and were uninsured for a minimum of six months could apply for the Pre-Existing Condition Insurance Plan in their state. As a government plan, applicants had to be U.S. citizens or legal residents to be considered.
Proof of a pre-existing condition was provided through at least one document from a health care professional or health insurer. Documents accepted to prove a preexisting condition included:
- A letter of denial from a health insurer for individual coverage (not a group plan through an employer) dated within the past year of the plan still accepting applicants. An alternative would have been a letter dated in the past year from an agent or broker licensed in your state that indicates you were ineligible for an individual plan from one or more companies due to your health.
- An offer of individual insurance coverage (not group) that you turned down because it did not cover your condition, dated within the past year. The offer must include a statement making note that the medical condition will not be covered if you agreed to accept.
- A letter from a doctor, physician assistant, or nurse practitioner for persons under age 19 or living in Massachusetts or Vermont, dated within the past year. The letter must give your name and a current or past medical condition, disability, or illness, as well as the health care professional’s name, license number, state of licensure, and signature.
- An offer for individual insurance for persons under age 19 or living in Massachusetts or Vermont, dated within the past year, that you did not accept because the premium was too high. The offer of coverage must show a premium rate that is at least double the cost of your state PCIP’s Standard Option.
Application & Approval
Within 2-3 weeks after applying, individuals would receive a letter acknowledging whether or not their application has been approved for a PCIP. If you were approved, the letter would indicate a monthly premium rate, the start date of coverage, and how to pay your first premium. In order for your coverage to become effective, you were required to send the first premium payment within 30 calendar days after receiving the approval notice. Your application would be cancelled if the premium wasn’t sent or received within that range.
Once your coverage began, all covered benefits would be available immediately. Even the treatment of a pre-existing condition didn’t require a waiting period. If your application was received between the 1st and the 15th of the month, your plan would start on the 1st of the following month. If your application arrives between the 15th and 31st, your coverage would begin the first day of the second month, though you also had the option of choosing an earlier start date.
If your application was denied, you would receive a letter explaining why you were not approved. You then had 45 days after receiving the notice to file an appeal if you felt a mistake was made in the evaluation process. You would also be able to re-apply for PCIP if you met the criteria for eligibility. To file an appeal, you would write a letter detailing your reasoning for the appeal and include any additional documents to prove you qualify for PCIP. Once that letter was received, PCIP will send you a final decision regarding your eligibility. They then gave you 45 days to file another appeal for the denial letter, after which all rights to appeal were lost.
The federally operated PCIP provided the following three different plans:
- Standard Plan
- Extended Plan
- Health Savings Account (HSA) Plan
Every plan type had different premium levels, annual deductibles, separate pharmacy deductibles, and prescription copayments. HSA plans allowed members the option of opening a health savings account for tax-advantaged funds used specifically for medical costs – as you can find with an individual health plan.
Once the deductible was reached, PCIP covered 80% of in-network services, and you paid 20% coinsurance. All covered services for network and non-network care add up to your out-of-pocket maximum, which was $7,000 in 2012 – the final year of PCIP coverage. When using network providers, the maximum was even less. PCIP plans had no lifetime maximum on how much the plan paid for your care.
After the Affordable Care Act changed the laws and options for individuals, PCIP was no longer necessary. Those who were part of the temporary high-risk pool are now able to shop with any insurer of their choice, or purchase a plan through their state’s health insurance exchange. PCIP stopped accepting applicants in most states as of February 2013, especially the federally-run plans. PCIP members could use their coverage until December 31, 2013, when their benefits expired. PCIP was a great program to insure the sick, uninsurable population from the enactment of the PPACA until the guaranteed issue provision set in.