SAN FRANCISCO -- The one thing Arthur Yu worried about since he lost his health insurance five years ago was what he would do if he ended up in a hospital due to a serious illness or accident.
“If something major happened to me, my savings would get wiped out,” the 56-year-old Hong Kong native said.
Yu lost his health insurance when he lost his job and his benefits ran out through “COBRA,” the federal law allowing recently unemployed people to continue their employer health plan at their own cost for a limited period.
No Insurer Would Cover Him
No private insurer would cover Yu because he was diabetic and had high cholesterol. He was deemed a high-risk patient.
In January 2012, he enrolled in California’s Pre-Existing Condition Insurance Plan (PCIP), paying about $520 a month.
“The peace of mind alone is worth it,” said Yu, who is currently in business for himself in a community south of San Francisco as an engineering consultant.
As many as 25 million Americans with pre-existing health conditions lack health insurance, according to the U.S. Department of Health and Human Services.
Under Obamacare (officially know as the Affordable Care Act, or ACA), California launched its PCIP program in September 2010, becoming the first state to do so. The program provides health insurance to people like Yu, who were locked out of the individual health insurance market because of a pre-existing health condition. Other states have had slow starts but every state currently offers a version of PCIP.
PCIP is a temporary program and is considered a “bridge” to Jan. 1, 2014. That’s when ACA will go into full effect. At that point, health insurance companies will be banned from denying coverage to people with pre-existing health conditions.
In the meantime, any U.S. citizen with a pre-existing condition can enroll in the program, provided he or she has been without health insurance for at least six months.
Highest Enrollment in California
There are currently 15,263 enrolled in California’s PCIP, making it the state with the highest enrollment.
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 the 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.
That’s because the cost of claims for care under the initial 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 could be as low as $127 or as high as $652 per month (reduced from the original high of $1,003).
Of those currently enrolled, more than half are white. Of the rest, 9.2 percent are Asian or Pacific Islander, 8.3 percent Latino, 2.8 percent African American, and 0.3 percent Native American or Alaska Natives. The remaining 22 percent are of unknown ethnicity.
Nationwide, PCIP enrollees are older, visit the emergency room more often and file costly claims. Cancer alone accounts for 27 percent of the PCIP’s total costs, according to a HHS report.
California operates a second high-risk health insurance program called the Major Risk Medical Insurance Program (MRMIP), which was set up long before health care reform.
Prior to his enrollment in PCIP, Yu was paying about $50 a month for the generic medications he was taking to control his diabetes and cholesterol.
Children Benefit, Too
Yu’s children are benefiting from Obamacare, as well. Two of his college-age children, who are 23 and 20, have been on his wife’s employer-sponsored insurance plan, under a provision in ACA allowing young adults to stay on their parent’s insurance plan until they turn 26, two years longer than under previous rules.
“Even though they are healthy, having health insurance gives us a feeling of security,” Yu said.
Ever since he got on the PCIP program, Yu has stopped worrying about losing his “nest egg,” the modest savings he had carefully built up for a rainy day over the years.
“That could be gone if I get a serious illness and had no PCIP," he observed.
This report was made possible by funding from The California Endowment and is part of New America Media's series on Obamacare.
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