When we last checked in on the high risk pools created under the Affordable Care Act (called the Pre-existing Condition Insurance Plans, or PCIPs), it was to relate the stories of Randy Morales and Kathleen Watson, individuals whose access to insurance coverage through the PCIPs likely saved their lives. Their stories are representative of over 135,000 Americans – some of whom, like Randy, were small business owners who had previously dropped coverage because of cost. And some of whom, like Kathleen, had previously tried to purchase coverage but were denied because of a pre-existing condition. For these individuals, the PCIPs offered not only access to life saving treatment but peace of mind, knowing that their insurance would protect their families from financial ruin.
It is thus disappointing to hear that the Obama Administration is closing the PCIPs to new enrollment, even though the program was authorized through the end of 2013. The problem is money, or lack thereof. The PCIPs are running out of it. Congress appropriated $5 billion for the program in 2010, but because many enrollees have had considerable health care needs, the cost of the program exceeded original estimates. The Administration will allow folks like Randy and Kathleen to stay in the program to maintain coverage for their treatment needs, but no new people will be allowed to enroll.
Of course, by design, the ACA gave the PCIPs an expiration date. They were meant to serve as a bridge to 2014, when people will no longer be denied coverage because of their health status. Those currently enrolled in a PCIP will have an opportunity to enroll in a traditional insurance plan – and access the new premium tax credits – come January 1, 2014.
The early closure of the PCIPs provides some important lessons for policymakers. While some opponents of the ACA have touted high risk pools as a better way to cover people with pre-existing conditions, there is increasing evidence that they are not a sustainable solution. Gary Cohen, Director of the Center for Consumer Information and Insurance Oversight (CCIIO), which runs the PCIPs, put it this way in a Washington Post interview: “What we’ve learned through the course of this program is that this is really not a sensible way for the health-care system to be run.”
As many as 34 state high risk pool officials are probably shaking their heads, knowing that the federal program simply faced many of the same challenges that the state-run programs have faced. These states were running their own high risk pools long before the ACA was enacted (the longest running high risk pools are in Connecticut and Minnesota, both operational in 1976). For the most part, these programs have fallen short of being a viable source of coverage for people with health needs. Most won’t cover pre-existing conditions for up to a year after enrollment, meaning that people with serious chronic conditions must go for a long time without necessary care. Many impose annual or lifetime caps on coverage. And even with those limitations, far too many programs offer premiums that are priced out of reach for all but the wealthy.
What we need are not more high risk pools, but rather a system in which everyone buys in – the healthy and the sick (because no one stays young and healthy forever)….Where no one can be denied coverage or charged a higher premium because of a pre-existing condition…..And in which low- and moderate income people can receive financial assistance to help them pay their premiums….And all plans must meet a minimum standard for adequacy, so people can be assured that their coverage really means something.
Guess what? If you like that vision, I’ve got some good news. That’s Obamacare. And it’s all happening beginning January 1, 2014.
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