Published April 25, 2014
The continued extensions for those enrolled in the Pre-existing Conditions Insurance Plan (PCIP), which was created to ensure people with such conditions wouldn’t face a coverage gap as the Affordable Care Act unrolled, are coming to an end on April 30, according to a source close to the matter.
The PCIP plan kicked in on Aug. 1, 2010 and provided coverage for people with pre-existing conditions until federal and state insurance exchanges went live on Oct. 1. The program was slated to end at the start of 2014, and has been extended several times since.
A source told FOXBusiness.com that enrollees on PCIP who do not have coverage on May 1 will be able to partake in a 60-day special enrollment period on the ACA’s exchanges, and coverage will be backdated to May 1.
The ACA mandates that every individual in the country have insurance by March 31, or face a fine of $95 a year or 1% of their annual income for failing to comply.
Through April 17, 8 million people had selected plans on both state and federal exchanges. However, it has not been clarified how many people in that pool have paid their first month’s premiums. The insurance industry typically considers a person enrolled after making that first payment.
Analysts say the original delay to PCIP was to avoid a public-relations meltdown if this group had been left without coverage while the exchanges were prepping to go live. All plans under the ACA have to include 10 essential health benefits, including prescription drug costs and mental health care. The law also makes it illegal to deny coverage to people with pre-existing conditions or be charged more than three times higher than a young or healthy person would be for coverage. Pre- ACA, that ratio was five to one.
Yevgeniy Feyman, Manhattan Institute scholar, says the pool of people left in PCIP has likely fallen from the several hundred thousand it was a few months ago. The remaining people will likely disburse among charity care plans at hospitals, exchanges, employer-sponsored plans or Medicaid, he adds.
“A lot of these people will funnel out. Those who buy on exchanges will probably get a good deal. Some might be cheaper, but others may be more expensive if they go for a comprehensive platinum plan.”
ObamaCare offers tiered plans for enrollees based on different coverage levels, ranging in price. HHS reported the average American would be $328 a month for a mid-tier plan, pre-subsidies, which are available for those making up to 400% of the federal poverty level. This is about $45,000 for an individual and $94,000 for a family of four, according to 2013 guidelines.
The good news for consumers without pre-existing conditions are that the PCIP members are already priced into next year’s premiums. The bad news is that analysts are predicting double-digit increases in premiums due to the risk pools projected, and inflation within the industry overall.
“This particular event won’t have a big shock on rates,” Feyman says. “These rates will increase, but that would have happened no matter what.”
The PCIP plan could also make a comeback in the future, he says, as it was widely embraced by even the staunchest opponents of the ACA. “This was a reform Republicans like, so it could be a way down the road to cut down some premiums,” he says. “You could put people with really serious conditions on PCIP plans so as to not impact the main risk pool and to draw premiums down.”