Enrollment in Preexisting Condition Program Falls Below Expectations

Enrollment in Preexisting Condition Program Falls Below Expectations
October 12, 2011

Loren Heal

Loren Heal (loren.heal@gmail.com) is a research programmer at the University of Illinois at Urbana-... (read full bio)

Providing insurance for those with preexisting conditions was a key selling point for President Obama’s health care law. But acceptance of the federal Preexisting Condition Insurance Program has been far below expectations, with few people dropping their private insurance to join the program.

The PCIP allows people who are denied private coverage on the basis of a health condition to buy health insurance at a standard group market price. Individuals must be completely without qualified insurance for six months before they are eligible. Currently 27 states have their own programs. In the other 23 and the District of Columbia the federal government administers the program, according to a U.S. Department of Health and Human Services (HHS) spokesperson familiar with the program.

Fewer Than 30,000 Enrollees

Although HHS has lowered premium rates and eligibility standards, the adoption rate has held steady at roughly 3,000 people per month since the program started. Only 27,500 people had taken advantage of the program through July 2011, up from 8,000 in November 2010.

That contrasts with approximately 100,000 people per month who typically adopt consumer directed health plans such as HSAs, according to data from the Association of Health Insurance Plans.

According to HHS, actuaries recently were able to refine the methodology and the risk rate in 18 of the 24 government plans and determine premiums could be reduced sharply, by as much as 40 percent. Some eligibility procedures have also been eased, to the point that a hand-carried note with specific information from a doctor can be used in place of a formal letter in the application process.

 

CHART:

Date

Total PCIP Enrollment

Nov 1,2010

7,986

Feb 1, 2011   

12,437

Apr 1, 2011   

18,313

May 1, 2011   

21,454

Jun 1, 2011    

24,712

July 1, 2011

27,489

 

Few Consumers Moving to Program

Ed Haislmaier, a senior research fellow for health policy studies at the Heritage Foundation, has not seen any evidence of consumers dropping their private insurance to adopt PCIP. He says many consumers who fall into this category are already in high risk pools which predated Obamacare, operating under the guidance of the National Associate of Insurance Commissioners.

“If you’ve had an issue where you couldn’t get coverage, and you have a serious medical condition that’s expensive, and you’re already in one of these high risk pools, and it’s 125 percent or 150 percent of standard rates, then you would love to jump to something that is 100 percent of standard rates, but you’re not allowed to do it,” Haislmaier said

Haislmaier points out HHS’s own data show fewer than 1 percent of Americans have ever been denied coverage for a preexisting condition.

“I think if there was any significant problem here, you would see higher enrollment numbers as a result. So far we haven’t seen that,” Haislmaier said. “What this shows is that people not being able to get insurance is not really the issue, but whether people are able to get insurance at the price they want to pay.”

Loren Heal

Loren Heal (loren.heal@gmail.com) is a research programmer at the University of Illinois at Urbana-... (read full bio)