The Pre-Existing Condition Insurance Plan, (PCIP) one of the first portions of the Affordable Care Act to go into affect, is suspending enrollment. The short answer as to the reason why is because the funding is running out. Those currently enrolled will still be covered by the plan.
The Pre-Existing Condition Plan (PCIP) is part of the Affordable Care Act. It was created in 2010, and was one of the very first health reform changes to go into affect. The main purpose of the PCIP was to guarantee health insurance coverage for people who had previously been struggling to find coverage due to the fact that they had certain types of health conditions.
Before 2010, private insurers were unwilling to offer coverage to people whom they considered to have a pre-existing condition. The reason was that the insurers viewed people who were seriously ill, or who had a chronic condition, as too expensive to cover. Insurers were either flat out refusing coverage, or were charging a premium that was significantly higher in cost than their usual rates.
Some insurers were including all kinds of things, from asthma, to having undergone a Cesarian section, as a pre-existing condition. People who had cancer, diabetes, and other conditions – those who needed insurance coverage the most – were being denied it.
The PCIP, over the years, has provided health insurance coverage for more than 100,000 people, nationwide. It will continue to cover those who are already enrolled in the program. However, beginning on February 16, 2013, the federally-run PCIP is suspending acceptance of new enrollment applications until further notice. State-based PCIP plans may still accept enrollment applications through March 2, (and then will suspend enrollment until further notice).
Before you look at this as a failure of the Affordable Care Act, consider two important factors. The PCIP has covered, (and will continue to cover) more than 100,000 people who would not have otherwise been able to find health insurance coverage. The PCIP was intended to be a temporary program that would end on January 1, 2014, when the health plans purchased through the exchanges would go into affect. Insurers will be prohibited from denying coverage due to a pre-existing condition after that date.
Why is the PCIP suspending enrollment now, instead of waiting until January 1, 2014? It has to do with funding. The program has a limited amount of funding from Congress. According to Kaiser Health News, the program was funded with $5 billion.
Gary Cohen is the director for the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services (CMS). He said:
We have a set amount of money and we will not exceed it. We are doing everything we can to avoid running out of money.
Image by 401(K)2013 on Flickr