Health Reform Proving a ‘Lifeline’ for the Uninsurable

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BEVERLY HILLS, Calif. - After having had private health insurance since he was 24 years old, Doug Ogden noticed in 2009 that his premiums “were spiking at a crazy rate,” pricing him out of the market. That aside, he said, Blue Shield was chipping away at his benefits, “decreasing coverage dramatically.”

“I was getting little value for what I was paying,” he asserted.

So Ogden dropped his Blue Shield coverage and went on his partner’s employer-based group insurance plan.

Five years earlier, though, Ogden, a small business owner, had been diagnosed with central sleep apnea, a condition that if left untreated could lead to such serious medical conditions as heart disease and strokes.

Then in 2010, his partner lost his job, and Ogden found himself uninsured. Worse, he found himself uninsurable because of his pre-existing health condition. (Insurance companies currently can deny with impunity people with pre-existing conditions.)

Pre-Existing Condition Plan Available Now

“I frantically went online looking for options, and found that the Affordable Care Act (ACA) had phased in the Pre-Existing Condition Insurance Plan” (PCIP) in October 2010, said Ogden, now 50.

Knowing that the major changes under the ACA wouldn’t completely kick in until Jan. 1, 2014, Congress included provisions that would take effect quickly. Among these bridges to full implementation of the health care reforms, PCIP was created to protect at least some patients from being denied coverage before 2014.

Starting next year, ACA will prohibit all insurance companies from refusing coverage to people with pre-existing conditions. In the meantime, though, PCIP guarantees access to insurance for United States citizens who have pre-existing conditions and have been uninsured for at least six months.

To prevent people with private health insurance from switching to the less costly PCIP, the health reform law put in the six-month requirement provision, said Jeanie Esajian of the Managed Risk Medical Insurance Board (MRMIB), the California agency that administers the PCIP.

Some of the PCIP programs are run by the federal government and some by the states. Applicants need only show a letter from a doctor stating they have had a medical condition in the past year.

“It was so easy to sign up for the program,” observed Ogden. He added, “There was nothing automated about the process. Real people explained everything to me. And the paperwork was simple.”

PCIP Limited, Eligibility Unclear

The Congressional Budget Office originally estimated that 250,000 would sign up for PCIP by 2013 nationwide. But as of May 2012, only about 58,000 had done so.

California, the first state to implement the PCIP, currently has the highest enrollment in the nation with 15,263, followed by Florida and Texas.

The Golden State’s health administrators first estimated that California’s $761 million federal allotment for the plan through 2013 would allow enrollment of 23,000 people with pre-existing health conditions.

This federal subsidy helped to keep premiums enrollees must pay affordable. But low initial enrollment in the plan forced the state to request federal approval to lower the monthly rates for beneficiaries.

The U.S. Department of Health and Human Services (HHS) approved that change in 2011, and enrollment grew. But the cost of claims for care under the plan turned out to be $3,100 -- almost triple the original estimate of $1,100.

Currently, Californians enrolled in PCIP pay an average of $565 per month. Depending on the individual, the current monthly premiums can be as low as $127 or as high as $652 per month (reduced from the original high of $1,003).

In order to cover the additional costs, HHS authorized a $118 million increase in California’s PCIP funding for 2012. Esajian said that although the funding for 2013 is “not yet public,” MRMIB will continue to enroll all who apply this year.

It is unclear how many Californians are eligible for the program. The California Endowment estimates the figure as high as 6.5 million, while other health care agencies say the numbers could be between 200,000 and 400,000.

Esajian, of the state’s managed-risk insurance board, said the higher estimates don’t take into account limitations restricting who can qualify for the new program.

California’s PCIP enrollees don’t reflect the states changing demographics. Of those currently enrolled, more than half are white. Of the rest, 9.2 percent are Asian and Pacific Islander, 8.3 percent Latino, 2.8 percent African American, 0.3 percent native American and Alaska Natives and the remainder, 22 percent, are of unknown ethnicity.

Information in English and Spanish

Early in 2012, the MRMIB agency began campaigning and advertising in English and Spanish. PCIP information on the board’s website is now in both languages.

Ogden is paying a monthly premium of $381 for his PCIP coverage, with a $1,500 deductible, an amount he views as not exactly low.

But “it’s certainly more affordable than what I was paying for private insurance, which was north of $700, and the number of doctors in the PCIP network is quite large,” Ogden said. He noted, “For me, PCIP is a life saver.”

“I have auto insurance and earthquake insurance,” he went on. “To not have health insurance was the most frightening thing.”

This report was made possible with funding from The California Endowment, and was produced as part of New America Media’s series on the Affordable Care Act.

 

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