Government cutting premiums for Pre-Existing Condition Insurance Plan

Kaiser Health News: The federal government is "trying to spur enrollment in a new health insurance program for uninsured people with pre-existing medical conditions" by slashing rates. The announcement came last Friday "as the government released the latest enrollment figures for these high risk insurance pools, which have attracted far fewer customers than expected."

The Pre-Existing Condition Insurance Plan, established under the new health care law, has seen higher enrollment in states with lower premiums, such as Pennsylvania. "The federal government is subsidizing the program with $5 billion until 2014 when the program ends. At that time insurers will no longer be able to discriminate based on a person's health status. … HHS said Friday that it would lower premiums by about 20 percent in 2011 and offer different cost/benefit options in those plans and asked the states running their own programs to consider lowering their rates as well" (Galewitz, 11/5).

The Associated Press/The Washington Post: "Government economists had projected that people turned down by private insurers would flock to the new Pre-Existing Condition Insurance Plan, with 375,000 expected to sign up this year. But as of this week, a little more than 8,000 had enrolled, officials said. Part of the problem is sticker shock. Premiums vary by state, and can range from $400 to $600 per month or more for people in their 40s and 50s." The new lower cost plans "will be offered in 23 states and Washington, D.C… The remaining 27 states, which opted to run their own plans, will make their decisions independently" (Alonso-Zaldivar, 11/5).

The Hill: "Health officials in the 27 states that are operating their own pools with federal funding have been invited to offer more choices next year, but the program is based on state flexibility, and they're not required to do so."

"Richard Popper, director of insurance programs at HHS's Office of Consumer Information and Insurance Oversight, said the slow uptake compares favorably to what happened with the Children's Health Insurance Program a decade ago when it was brand new" (Pecquet, 11/5).

The Wall Street Journal: "The Department of Health and Human Services said it will offer three types of plans beginning in 2011, instead of just one offered now. The existing standard plan will offer premiums almost 20% lower than this year's plan … with a $2,000 medical deductible and a $500 drug deductible. Premiums vary by state and age. … In Texas, they start at $323 per month for the youngest enrollees and go up to $688 per month for the oldest." HHS "will add a second plan with higher premiums and lower deductibles of $1,000 for medical and $250 for prescriptions. A third plan will include a tax-advantaged health savings account and carry a $2,500 deductible." The department also defined a new category of premiums for children with pre-existing conditions, as private insurers have stopped offering coverage to them in response to "requirements in the (health overhaul) law that compel insurers to cover all children regardless of their health status" (Adamy, 11/5).

National Journal: In another move to boost enrollment in the transitional plan, "HHS is working with state insurance departments to require insurance companies to notify individuals who are denied coverage due to a pre-existing condition about the availability of the federal high-risk pools" (McCarthy, 11/5).

The Los Angeles Times: "Last month, California joined the ranks of states that have created a federally funded health plan for people who are medically uninsurable. All states either have a plan or will have one soon." California's Pre-Existing Condition Insurance Program, mandated by the federal healthcare overhaul law, "is designed to provide coverage to people who cannot get private insurance due to preexisting conditions … through 2014, when private insurers will be required by law to provide insurance to everyone, regardless of their prior health issues." California is one of several states that already subsidize a form of high-risk health insurance, but the new plans will be funded with federal dollars and run by states or by the federal Department of Health and Human Services. California residents can choose between the state plan and the new federal plan, which have different co-payments, deductibles, and premiums (Worth, 11/8).