Includes material on start-up health reform: The Pre-existing Condition Insurance Plan (PCIP) and the phase-out of the federal role
For millions of Americans with a pre-existing medical condition, health insurance prior to 2010 often was an unattainable goal. In the absence of laws requiring insurers to provide individual coverage to people with pre-existing conditions, many of these people joined the ranks of the uninsured. These uninsurable individuals have sought coverage, but have been unable to purchase it because they have been rejected or because they have been offered coverage only at unaffordable, high premium rates. Because of their often complex or costly health conditions, uninsurable individuals are the segment of the larger uninsured population that most needs health insurance coverage.
To aid uninsurable individuals, 35 states implemented high-risk health insurance pools over three decades.
The Federal Transitional Role: The Federal health reform law of 2010 provided $5 billion among all 50 states, for newly created or add-on expanded programs run by states or by a designated insurer, if states choose those options. 27 states had done so by fall 2010. 23 states deferred to the federal government to handle the new programs.
The Affordable Care Act (ACA) also established a major new 3 1/2 year transitional program known as the Pre-Existing Condition Insurance Plan (PCIP), which launched in the summer of 2010. The PCIP operational details are provided in section 2, below.
State Initiatives: In response to the problems of uninsurable individuals, 35 states set up high-risk health insurance pools over a 25 year span, from 1976 to 2009. Across these 35 states, the national enrollment was 226,615 by December 31, 2011. This compared to 200,047 as of December 2007. This was about 1.9 percent of the individual market enrollment, but is up to 25 percent of the individual market documented to be subject to denials or "adverse underwriting" restrictions due to pre-existing medical conditions.
2017 analysis articles:
(Disclaimer: NCSL does not endorse the content of third party online material, which is provided for general information only)
ACA Repeal Could Mean Return to ‘High-Risk Pools’ - [full article] published by Stateline, 2/16/2017
2017 update by HHS/CCIIO: Coverage for pre-existing conditions [An explanation for consumer coverage in 2017]
State High-Risk Pools: An Overview. Health reform bills passed in the House and Senate would create a national high-risk pool insurance program to offer health coverage to otherwise uninsurable individuals during the interim period between the enactment of legislation and the implementation of broader health care reform. This issue brief discusses the possible structure, operation and benefits,: [Overview brief] by Kaiser Family Foundation, January 2017.
Why High-Risk Pools (Still) Won't Work. Many proposed alternatives to the Affordable Care Act rely on high-risk insurance pools to cover people with preexisting health conditions. A 2015 blog post, by the Commonwealth Fund argues why they are not a substitute for the ACA’s coverage expansions.
ARCHIVE: TRANSITION CHRONOLOGY 2010 to 2014:
The historical sequence of state-only, to federally subsidized, to phase-out of high risk pools has been retained below for those policymakers who are examining future use or restoration of high risk pools. Some publications or links may no longer work as of 2017.
A report as of June 2014 listed the status of each of the 35 state high risk pools, and their plans regarding anticipated continuation of enrollment and coverage. [ 2014 Pool Enrollment Survey ] The June chart grouped the state pools into 2 categories:17 states that intended to cancel coverage by early/mid-2014 and up to 18 that intended to continue to provide coverage in some capacity until a final decision is made. The status table, based an surveys by NASCHIP, was to be periodically updated.
From the federal perspective, as of late 2013, 17 States (AR, CA, CO, IA, IL, KS, MI, MO, NH, NY, NC, OH, OR, SD, UT, WA) had begun the process of transitioning their state operated Pre-existing Condition Insurance Plans (PCIPs) to federally operated PCIPs, a process that is coordinated by HHS and CCIIO. These in turn were set to terminate in early 2014. Only 10 states (AK, CT, MD, ME, MT, NJ, NM, OK, RI, WI) planned to continue to operate their own, state-based PCIP or high-risk pool.
For individuals that lost coverage on April 30, 2014, through the Pre-Existing Condition Insurance Program, (PCIP) they are able to enroll into a health insurance plan under the Special Enrollment Period. Section 1101 of the Affordable Care Act establishes a “temporary high risk health insurance pool program” to provide health coverage to eligible uninsured individuals with pre-existing conditions. The program, carried out by the Centers for Medicare and Medicaid Services (CMS) directly in some states and through contracts in other states and known as the Pre-Existing Condition Insurance Program (PCIP), has provided coverage to these eligible individuals since 2010. Section 1101(g)(3)(B) authorizes the Secretary of HHS to develop procedures to provide for the transition of PCIP enrollees into qualified health plans offered through an Exchange (also called Health Insurance Marketplace). This section also requires the Secretary of HHS to develop procedures to ensure that there is no lapse in coverage for these enrollees, including extending coverage after plan termination if she determines that an extension is necessary to avoid such a lapse. While the majority of enrollees transitioned out of PCIP coverage on January 1, 2014, the Secretary determined that an extension of PCIP coverage was necessary to avoid a lapse in coverage for PCIP enrollees who, on January 1, 2014, were not yet enrolled in other coverage. Thus, these individuals were offered transitional coverage beginning on January 1, 2014 through April 30, 2014.
> HHS PCIP Bulletin is available here and the PCIP Fact Sheet here - April 2014
Federal PCIP Coverage Extended through March 31, 2014. The federally-run Pre-Existing Condition Insurance Plan (PCIP) offered the option of two additional months of PCIP coverage to people who had enrolled in PCIP but had not yet found new health insurance coverage. This transitional coverage through March 31, 2014, allowed PCIP enrollees more time to review Marketplace plan options and enroll in the coverage that best meets their needs before open enrollment closes in March. They were notified on www.pciplan.com (no longer online) and by mail of this option to extend their PCIP plan through March, along with details about cost-sharing. Eligible enrollees could purchase PCIP transitional coverage by sending in February and March premium payments; which were the same monthly rate that they paid for January 2014.
On February 16, 2013, the federally-run Pre-Existing Condition Insurance Plan (PCIP) suspended acceptance of new enrollment applications until further notice. State-based PCIPs could continue accepting enrollment applications through March 2, 2013 and then suspended acceptance of new enrollment applications until further notice.
Provided immediate access to insurance for Americans who are uninsured because of a pre-existing condition.
Established a temporary national high-risk pool to provide health coverage to individuals with pre-existing medical conditions.
Premiums in the new federal pool were designed to be 10 percent to 50 percent lower than current state rates. Co-payments and deductibles were expected to be considerably lower. Current beneficiaries in state high-risk pools could get the federal coverage only if they drop out of their state pool and remain uninsured for six months.
The high risk pool provision of the federal law became effective 90 days after enactment, June 21, 2010. Individual policies were offered for sale after July 1, 2010; the federal program remains legally in effect until January 1, 2014.1