Health insurance and individuals with pre-existing medical conditions

Insurance companies, just like any other business, are in it to make money.  The less likelihood of a payout for them for a particular individual, the better for their bottom line. That is why consumers with pre-existing medical conditions used to encounter tremendous difficulty in finding an insurer.

However, that has changed with the passage of the Affordable Care Act in 2010. One of the important policies put forth by the Act is that no health insurance company can deny coverage to an individual because he has a pre-existing health condition. Just as importantly, the Act also provides that a company cannot charge a higher rate to the individual than it would for a healthy applicant.

It is important to note that the part of the Act that requires companies to cover individuals with pre-existing medical conditions will take effect on 2014. In the interim, the government is providing these individuals with a solution known as the Pre-Existing Insurance Plan or the PCIP.

What is the Pre-Existing Condition Insurance Plan?

The PCIP is one of the important provisions of the Patient Protection and Affordable Care Act. This plan makes health insurance available to individuals who have pre-existing medical conditions and has not had any coverage for 6 months or more.

This program is implemented by either the state government or the federal government depending on where an individual lives.

Benefits offered by PCIP

The plan will cover eligible individuals no matter what health condition they have and it will not cost them more because of that condition nor will they be rejected because of their income. When a covered individual secures the services of an in-network physician and that physician provides preventive diagnosis, the PCIP will provide 100 percent coverage with no deductible.

The plan covers a wide range of benefits to include primary, hospital, and specialty care along with prescription medicines. The plan's benefits are immediately available once coverage begins - the covered individual need not wait to enjoy them.

For a summary of benefits offered under the plan, the following link provides a detailed explanation: http://www.pciplan.com/forms/pdfs/2012BenefitsSummary.pdf

Three option plans offered under PCIP

Each of the following plans carries different deductibles, co-payments and premiums:

  • Standard option plan - offers coverage for medical services and prescription medicines.
  • Extended option plan - offers coverage for medical services and prescription medicines with lower deductibles.
  • Health Savings Account - offers coverage for medical services and prescription medicines along with higher deductibles plus a tax-exempt savings account wherein money can be deposited for use on allowed medical expenditures.

Federally-run versus State-run PCIP

To find out if your state has a federally-run PCIP in place or it has one implemented by your state government, go to https://www.pcip.gov/PCIP_States.html

PCIP eligibility

  • The applicant has to have a pre-existing medical condition.
  • He or she must be an American citizen or be a legal U.S. resident.
  • The applicant should have no health insurance coverage for the past six months.

Individuals who are INELIGIBLE for PCIP coverage are those:

  • Who have another insurance plan covering them even if this does not cover their pre-existing health condition.
  • Who are part of a state-sponsored high risk insurance pool.
  • Who have coverage provided under Medicaid, Medicare, VA, TRICARE or CHIP.
  • Who are afforded employer-sponsored coverage to include COBRA or a continuation of that coverage even when coverage is near end.
  • Who are covered by limited medical benefit plans.

Documentation requirements

If you live in a state where the PCIP is implemented by the federal government, you will be required to submit at least any one of the following:

  • The insurance company's letter denying you coverage with a date that falls within the last twelve months. A similar denial letter issued by an insurance broker or agent in the past twelve months will also suffice. The broker or agent has to be legally licensed by the state in which you live in.
  • A health insurance offer (not offered in line with your job), which indicates you did not accept it because your pre-existing health condition is not covered under the plan. The offer has to have a date that falls within the past twelve months to be acceptable. This formal offer should come with a rider that states your pre-existing health condition will not be covered under the plan if the offer is accepted by you.

For individuals whose age falls below 19 or who reside in Vermont or Massachusetts, a letter from a physician, nurse practitioner, doctor's assistant, indicating current and past health condition, illness or disability. The letter must state the name along with signature of the physician, nurse or doctor's assistant and the corresponding license number and state where license was issued.

For individuals under nineteen years of age or who reside in Vermont or Massachusetts, a formal offer of individual health insurance, the date of which falls within the past twelve months, which was not accepted because of the high premium attached to it. That premium has to be two times the Standard Option PCIP premium offered in the state.

Premium rates for PCIP per state

Premium payments vary from one state to another. To know how much you have to pay for PCIP coverage in your state, go to https://www.pcip.gov/ and then click on "PCIP in Your State."

Premium payments and related matters

The due date for premium payments falls on or before day one of every month.

Payments can be made money order, personal check or the use of other certified funds. Over the phone payments or the use of credit cards are not accepted.

Late payments can lead to getting disenrolled from coverage. An individual who gets disenrolled will be required to wait for a period of six months from the date of cancellation before he or she can apply again for coverage.

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