Price Breaks Kick In For 'Pre-Existing Condition' Insurance

Uninsured sick people got some good news recently — or some of them did, anyway. Starting Friday, the Obama administration reduced the premiums by up to 40 percent in special high-risk insurance plans that the federal government is running in 17 states and the District of Columbia.

These "pre-existing condition insurance plans" were created under the 2010 health care overhaul to provide guaranteed coverage to people who have medical conditions that often make them uninsurable in the individual insurance market.

On the low end, Mississippi will reduce premiums by 2 percent. Several states will cut monthly rates in the 15 to 25 percent range, including the District of Columbia, which will reduce premiums by 18 percent. Six states, including Virginia, will reduce their premiums by 40 percent.

The change means that a 55-year-old District resident who would have owed $551 per month under the old pre-existing condition insurance plans rates for the standard plan will now owe $450. In Virginia, the same person's premium would now be $297 monthly, compared with $498 before.

The new premium rates take into account more state-specific data and thus more closely track the standard rates for individual policies in each state, as the law requires. "Now the program has been up and running for six to nine months, and … we've had an opportunity to refine the methodology," says Steven Larsen, director of the Center for Consumer Information and Insurance Oversight at the Department of Health and Human Services.

The administration reviewed rates in the 23 states and the District where it administers the pre-existing condition plans. Federally run plans in the other six states had rates that were already in line with individual premiums, and those rates didn't change.

Consumers in the 27 states that opted to use the money provided in the health law to run their own PCIPs may not see similar reductions in rates. (Maryland is one of the states that runs its own plan.) HHS has informed those states that they may modify their rates, but they're not required to do so.

(Even before the federal overhaul was enacted, 35 states offered high-risk pools for people with preexisting conditions. But those programs can be more expensive than the newer plans operating under the health law.)

Consumer advocates and federal officials hope that the lower premiums will encourage more people to sign up for the plans, which are intended as a bridge to 2014 when most of the provisions of the federal health law take effect and insurers will no longer be able to turn down applicants because of medical conditions. Although early estimates suggested that as many as
375,000 people might sign up for the pre-existing condition plans, as of April 30, 21,454 had enrolled.

Along with a legal requirement that people be uninsured for six months before signing up for the new plans, high premiums are probably the biggest stumbling block to enrollment, experts say. “They can’t really do anything about the six months, because that’s in the law,” says Kansas Insurance Commissioner Sandy Praeger, who heads the health insurance and managed care committee for the National Association of Insurance Commissioners. “But they can bring down the cost, which will help.”

Reducing the cost has made all the difference to Kathleen Watson of Lake City, Fla. Watson, 49, had been uninsured since 2004 when her COBRA coverage under her husband's previous policy expired. Because she had leukocytosis, a constant elevated white blood cell count, finding affordable coverage was impossible. Compounding her medical problems, in 2009 Watson was diagnosed with non-Hodgkin lymphoma, and subsequently developed an antibiotic-resistant bacterial infection that occurred when she was hospitalized with pneumonia.

Last year, when the health law created the new plans for people with pre-existing medical conditions, Watson looked into coverage. But the $605 monthly premium was more than she could afford on what she earns running a medical transport business.

Then she learned that rates in the three plans were coming down by 40 percent in Florida. She checked out the plans again, and this time signed up for a much more affordable $363 a month. Her coverage started July 1.

"I'm just happy to have insurance now," says Watson, who says she immediately needs a CT scan and a lung biopsy to check out enlarged lymph nodes in her right lung, bladder and colon. "Hopefully it does what it says."

At the same time that HHS is reducing premiums in many PCIPs, it's also making it easier for applicants to the federal plans to prove that they have a pre-existing medical condition. In the past, applicants had to present a letter from an insurer denying coverage before they could enroll. This was not only time-consuming but could also be a financial strain for people, say consumer advocates.

It's not uncommon for insurers to require applicants to submit the first month's premium at the time that they apply for coverage, says Stephen Finan, senior director of policy at the American Cancer Society's Cancer Action Network. The money is returned once the applicant is rejected, but it's difficult for many people to have what may be several hundred dollars tied up while their application moves through the process.

Under the revised rules, instead of showing that they were rejected by an insurer, applicants to the pre-existing condition insurance plans can now simply submit a letter dated within the past 12 months from a doctor, physician assistant or nurse practitioner stating that they have or have had a medical condition, illness or disability. "Doctors are getting word of this and they're offering to help people write the letters," says Finan.

There's no word yet on whether other states may follow the federal government's lead and reduce premiums or relax their application rules (many already accept physician letters as proof of illness). But even though the current changes only apply to 18 states, "this is a very positive step forward," says Finan. "I'm not sure we'll see a huge difference, but we expect to see a difference."

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  • by Ironic Location: enc on Jul 11, 2011 at 12:29 PM
    This morning Pat Robinson talked about the economy in Norway. He talked about their economic "health"-with health care for all. What he mentioned, but whispering, is that Norway owns their oil companies. They are NOT a socialist country, as many conservative would have you believe. They have taxes, private companies, private property ownership, and many other requirements for a democracy. They do have more social programs and it works!
  • by Truth on Jul 10, 2011 at 01:46 PM
    It's a mad dash by private health insurance and pharmaceutical companies to grab up all the money they possibly can before everything crashes down. The way it is now, only the poor (Medicaid), Elderly (Medicare), or the wealthy can afford health insurance. The folks out there who work every day and earn between 20k and 100k get totally shafted. Our health care system has quite literally the worst mix of free-market & socialist concepts possible. We force hospitals to care for everyone, but very few can actually afford it. We need a universal health care system in this country. I don't see it happening thanks to the same jugheads that just love voting against their own benefit. The system will have to collapse first and then be rebuilt.
    • reply
      by So true on Jul 10, 2011 at 02:47 PM in reply to Truth
      Very true. Americans pay more for health care than any country in the world, yet rank at the bottom for quality of care. Yes, we have the best hospitals and medical schools in the world, but as Truth so accurately stated, only the very poor, elderly and rich can afford it.
      • reply
        by Anonymous on Jul 13, 2011 at 02:39 AM in reply to So true
        We rank at the bottom for quality health care in what reality? We're worse than a third world country where they wash their hands between patients in a bucket and reuse their gloves???
  • by Anonymous on Jul 10, 2011 at 01:32 PM
    It also doesn't do a darn thing for those of us already insured and paying higher rates - rates that make it impossible sometimes to pay the copayment to USE the insurance. Should I sleep in the gutter to get help?
  • by BGB Location: BEAUFORT COUNTY on Jul 10, 2011 at 10:01 AM
    A Guaranteed plan for a insulin depend diabetic in beaufort county thru Aetna would cost $1648 per month. Yes you will give us insurance but who can afford it. The same policy for a quote healthy person is $310.00 per month. Seems to me regardless of his health plan people with pre-existing conditions are screwed.
    • reply
      by So true on Jul 10, 2011 at 02:52 PM in reply to BGB
      True, but in some states it's even worse. While living in California, I had one checkup where my BP was elevated. From that point on that one elevated BP made me -ineligible- for medical insurance and had to apply to be placed on a waiting list. Two years past and I still couldn't get medical insurance. This new law makes that practice illegal.
      • reply
        by Anonymous on Jul 13, 2011 at 02:37 AM in reply to So true
        With only one high reading, you can request to have it stricken from your medical records as inaccurate. If your BP isn't consistently high, it will be seen as a fluke and unimportant. You have the legal right at all times to see and have corrected your medical records if there is an error or something detrimental in them.
  • by Chuck WireWiggler Location: ChazWorld, Hyde Branch on Jul 10, 2011 at 09:23 AM
    I should be able to hold off on getting collision insurance for my vehicle until after I have a wreck. Where's the logic. The gubment doesnt realize that the insurance companies will just pass this expense along to the consumer???
  • by Barlow Location: Madison on Jul 10, 2011 at 08:56 AM
    Not for profit adequate health insurance should be a RIGHT as it is in most free market countries, not a privlege for the well to do.
    • reply
      by So true on Jul 10, 2011 at 02:49 PM in reply to Barlow
      The irony is that many hospitals are "not for profit" although they rake in millions every year in profits. Worse, they even charge uninsured patients more for the same treatment as those who have insurance even though the practice is supposedly illegal.
    • reply
      by Anonymous on Jul 10, 2011 at 04:26 PM in reply to Barlow
      Your right Barlow, everyone should be given everything for free, courtesy of those who work for a living. What ever happened to EARNING what you got out of life? Not anymore, we have turned into a nation where those who are unwilling to do for themselves and their families, think that they deserve everything for free, without contributing anything to the community or their country.
      • reply
        by Truth on Jul 10, 2011 at 06:13 PM in reply to
        I don't think anyone is asking for something for free. What the people want is an affordable solution. The people that work at true non-profits still earn a living, they do not usually work for free. The best solution is to learn from the rest of the world, to see what works and apply it. If we all work together and contribute there is no reason why we cannot have a successful health care system for every American, rich or poor, in this country. The horrible mess we have now is falling apart at the seams, and it is time for a drastic change. Learn about Medicare for All and give your support.
  • by ruby Location: ca on Jul 10, 2011 at 01:05 AM
    This comment has been deleted.
    • reply
      by Smells fishy to me on Jul 10, 2011 at 03:04 AM in reply to ruby
      SPAM for eHealth Insur.

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