As part of the health insurance over-hall legislation (the Affordable Care Act) passed in March of 2010, the government created a new program called, the Pre-Existing Condition Insurance Plan (PCIP) which is means of forcing private insurance companies to take on people who prior to the new law, were turned down for health insurance coverage due to a prior medical condition. The program became active, effective July 1, 2010 in all fifty states.
The program is administered directly by the U.S. Department of Health and Human services in some states (22) and by the states themselves in others; this means that the way the program is run might vary slightly from state to state, which means the process up for applying for the coverage is different from state to state.
The program works through joint cooperation between certain existing national health insurance carriers and the U.S. Department of Health and Human Services (DHHS) and is open to all Americans who meet the following criteria: You have to be a U.S. citizen, who has been uninsured for at least the prior six months, and you have to have had verifiable problems getting health insurance due to a prior medical condition.
The insurance is not free, nor is it offered at a reduced rate; instead the insurance is offered at a rate that the insurance company and the government agree is what individuals would have to pay were they not suffering from a prior medical condition. These rates vary from state to state because insurance rates as a whole vary from state to state, but the carriers are disallowed from charging higher rates for higher risks candidates, and they may not base their acceptance policies on applicants income level. Also, the rates charged are broken down by age group with people in older age groups paying more than for those in younger groups. As an example, for Indiana, where the program is run by DHHS, the rates are as follows:
Ages 0-34: $310
Ages 35-44: $372
Ages 45-54: $ 476
Ages 55+: $662
The plan covers all medical conditions regardless of whether they are the result of a prior medical condition, and offers all of the normal standard coverage of any other non-plan program, which means both primary and specialty health care including hospital care and charges and prescription medications.
The U.S. Department of Health and Human services will be assisted in running the state programs in the states where they will operate by the U.S. office of Personnel Management and the U.S. Department of Agriculture’s finance center. For those states that opt to run the program themselves, they will be watched or audited by the U.S. Department of Health and Human Services on a periodic basis.
SPECIAL NOTE: In late September and early October, reports began surfacing around the country that suggested very few people were signing up for the PCIP insurance due to an inability to afford the rates that were being offered for the program.