The new federal Pre-Existing Condition Insurance Plan (PCIP) program is hard to get into, too expensive for the typical uninsured individual with a chronic illness, and under-promoted, according to officials at the U.S. Government Accountability Office (GAO).
John Dicken, a GAO director, writes about those findings in a summary of a PCIP study conducted at the request of Sen. Mike Enzi, R-Wyo., the highest ranking Republican on the Senate Health, Education, Labor and Pensions Committee.
Health policy watchers once predicted the federal PCIP risk pool program would attract more than 200,000 uninsured Americans with health problems, and that program managers would soon have to shut out many applicants.
GAO officials found that, in the real world, total PCIP enrollment stood at just 21,454 in April.
"Early PCIP enrollment has been significantly lower than initially projected," Dicken says.
Congress added the PCIP program to the Patient Protection and Affordable Care Act of 2010 (PPACA) to provide immediate relief for uninsured people with health problems. PCIP is meant to help fill the gap between the date PPACA was signed in March 2010 and the day when insurers are supposed to start selling subsidized coverage on a guaranteed issue, mostly community-rated basis in 2014.
PCIP provides comprehensive health coverage for people who have a hard time qualifying to buy ordinary individual commercial health coverage.
Eligibility is not based on income. The price of coverage is supposed to be comparable to what healthy people would pay for health coverage purchased through the conventional market.
To avoid crowding out private health coverage, Congress required that people with health problems be uninsured for at least 6 months before applying for PCIP.
Congress let states choose between running PCIP risk pools themselves or letting the U.S. Department
of Health and Human Services (HHS) provide PCIP risk pool services for residents. The federal Office of Personnel Management (OPM) has helped HHS hire Government Employees Health Association (GEHA), Lee's Summit, Mo., to administer the federal part of the PCIP program.
GEHA is now providing PCIP services for 23 states and the District of Columbia; 27 states are running their own PCIP programs.
GAO officials came up with a list of five reasons why enrollment levels have been lower than expected.
One is the statutory requirement that enrollees be uninsured for 6 months before applying, Dicken says.
About 45% of the applicants who apply for state PCIP coverage and 69% of the applicants who apply for federal PCIP coverage are denied because they have had coverage within the past 6 months, Dicken says.
Some states eased the proof-of-risk process by creating lists of conditions that automatically qualify applicants for PCIP participation, even if applicants have not bothered to try to apply for commercial coverage, and about half of the PCIP enrollees in those states used the qualifying condition list to get PCIP coverage, Dicken says.
Another barrier to growth has been the cost of program premiums, which averages about $400 per month, Dicken says.
Lack of awareness has been a third major barrier, in part, Dicken says, because adults with pre-existing conditions have proved to be much more difficult to identify and target than low-income children.
"Additionally, hospitals and providers are generally less familiar with the individual insurance market and where to refer uninsured individuals," Dicken says.
PCIP managers are supposed to cap administrative expenditures at 10% of total program spending, and that cap also may be hampering marketing efforts, Dicken says.