Individuals who can’t get private health insurance — or simply afford it — will be immune from rejection come the new year. The Affordable Care Act’s major provisions that kicked in Jan. 1, 2014, prevent insurance companies from denying policies on the basis of pre-existing conditions such as high blood pressure, cancer, or even smoking.
The Affordable Care Act also limits the factors that health insurance companies can use in determining premiums. Age, address and tobacco use are allowable determinants. Of course, the young will pay less and the old will pay more, same as today. People who choose to smoke will pay more, as most do now, but the new federal rules cap the “tobacco penalty” at 50 percent of the premium.
The short-term outlook for the uninsured and the uninsurable who are in immediate need of medical treatment is not good, however.
Short on funding, the federal government’s Pre-Existing Condition Insurance Plan (PCIP) ended enrollments in mid-February 2013, with an eye toward the 2014 open enrollment by health exchanges that begins in October. The high-risk pool continues to subsidize care for those already signed up, but not for newcomers.
Update: In March 2014, the federal government extended the deadline for those in the high-risk pool to find new insurance until April 30. Previously it was March 31.
“The decision to suspend PCIP enrollment could have catastrophic consequences for the rare disease patient community because of treatment delays,” says the Rare Disease Legislative Advocates coalition.
The federal $5 billion program was running out of funds, even though enrollment was less than half than expected. To keep the program afloat through the end of 2013, the government also increased many enrollees’ out-of-pocket caps. It also lowered payments to medical service providers.
In California, the PCIP run by the Managed Risk Medical Insurance Board stopped accepting applications March 3, 2013. The state Major Risk Medical Insurance Program (MRMIP) continues, however, subsidized by tobacco taxes. That protection comes with a higher price, however. For a 50-year-old living in Los Angeles County, the PCIP premium of $381 jumps to $886 for PPO coverage (Anthem Blue Cross) or $537 for co-op (Kaiser Permanente).
The end of PCIP enrollment shutdowns apparently have created a new front in the war over “Obamacare,” but those desperately in need of insurance could benefit from the latest political conflict.
GOP legislation that would keep the federal PCIP program going through the year is making its way through Congress. The legislation, HR 1549, would reroute about $4 billion from the Public Health and Prevention Fund established by Obamacare. (The GOP measure is dubbed the Helping Sick Americans Now Act.)
That funding would reopen enrollments, as would a rival plan from Democrats. More controversially, the GOP bill would remove the requirement that individuals be uninsured for six months or more before becoming eligible. Critics say that invites people to go without health insurance, knowing that they can be bailed out if disaster strikes.
The Democratic proposal, HR 1578, would reopen enrollments using funding from a temporary increase in cigarette taxes. The sponsor is Rep. Frank Pallone, D-N.J., a longtime booster of the Affordable Care Act.
In March 2013, Republicans asked President Obama to reopen PCIP enrollments.
“Since the White House hasn’t answered our appeal, we’ve introduced legislation that would ensure that Americans with pre-existing conditions can once again have access to this program,” said Rep. Joe Pitts, R-Pa., who leads the Energy and Commerce subcommittee on Health.
The stop-gap funding measure marks a new strategy by Republicans, who have made numerous failed attempts to repeal the Affordable Care Act.
House majority leader Eric Cantor, R-Va., likes the legislation because it “makes it more difficult for the administration to implement Obamacare, and at the same time helps sick patients.”
The limited-government group Independent Women’s Voice charged: “This sends the message to the 40,000 people with pre-existing conditions who want to enroll in the program that they aren’t the real priority now that they are no longer politically useful.”
The PCIP program operates directly in 23 states and funds separate high-risk pools in other states such as California. In 2011, California received additional funding from the Department of Health and Human Services to keep its program going.
The high-risk program for pre-existing conditions was one of the first major provisions to go into effect after the 2010 enactment of the Affordable Care Act.