California Lowers Expenses for Pre-Existing Condition Insurance

TOPIC ALERT:

On Tuesday, California officials announced that the state's high-risk health insurance program will reduce premium costs by an average of 18%, HealthyCal reports (van Diepen, HealthyCal, 8/2).

Background on Program

The Pre-Existing Condition Insurance Plan provides coverage to individuals with pre-existing conditions until 2014, when the federal health reform law mandates that private insurers accept all applicants (California Healthline, 6/1).

The federal government has allotted California $761 million to operate its version of the program (Colliver, San Francisco Chronicle, 8/3).

To qualify for coverage in PCIP, an applicant must be a U.S. citizen or documented resident, have lacked medical coverage in the past six months and have been denied insurance in the past year because of a pre-existing condition (HealthyCal, 8/2).

Details of New Adjustments

Premium rate reductions in California's PCIP range from 8.2% to 24.3%. Rates are calculated based on age and geographic location.

Janette Casillas -- executive director of the Managed Risk Medical Insurance Board, which operates the program in California -- said the rate cuts will appear in billing statements beginning in October (Robertson, Sacramento Business Journal, 8/2).

In addition to the rate cuts, applicants no longer need to prove they have been denied coverage by insurers. Instead, they can provide a note from a physician stating they have a medical condition that could warrant denial of coverage (San Francisco Chronicle, 8/3).

Countering Low Enrollment

PCIP enrollment has been lower than expected in California and around the country.

About 3,500 California residents are enrolled in PCIP. However, MRMIB has estimated that it has the capacity to enroll about 24,000 individuals.

State officials said they hope the reduced rates will generate more enrollment in the program.

Consumer advocates say the state has not reached out effectively to those who would be eligible for the high-risk insurance pool, especially among non-white communities and individuals who do not speak English.

Jeanie Esajian -- director of external and legislative affairs for MRMIB -- said the state soon will roll out an extensive outreach initiative (HealthyCal, 8/2).

David Sayen -- a CMS regional administrator -- said federal officials also will launch an outreach program (Sacramento Business Journal, 8/2).

For additional coverage on the rate cuts in PCIP, see today's Capitol Desk post.


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