Another Pricing Test for Insuring People With Pre-Existing Conditions

June 21, 2011


Now available to Texans that have A Pre-Existing Condition and have been declined. THIS IS NOT A DISCOUNT PLAN but the Government Guarantee Issue Health Insurance.








For the second time in less than a year, the government hopes to help some of the as many as 25 million uninsured Americans with pre-existing health conditions. Critics say it may be a case of too little, too late.

Next month, a nationally funded health-care program will lower premiums and relax eligibility for some people with pre-existing conditions ranging from low blood pressure to cancer. Dubbed the Pre-Existing Condition Insurance Plan, the program is considered a cornerstone of President Obama’s health-care law, hitting a range of Americans from different economic classes, including the rising numbers of unemployed who have lost health-care coverage.

Even fans of the effort say it may be too pricey, cumbersome and unrealistic to reach the right people. Already, the existing version has had problems: Only about 22,000 people—a small fraction of the potentially eligible— have signed up. “Why is this only reaching a small number of folks when we have a much bigger problem,” says Larry McNeely, a senior associate for policy advocacy at the National Coalition on Health Care, a nonpartisan group advocating for comprehensive health-system changes. “We haven’t really cracked this problem properly.”

Under the new pricing structure, premiums will fall as much as 40% in some states. In Florida, for example, policyholders age 55 and older will pay $376 a month for standard coverage, almost 40% less than the current rates and a savings of $3,000 a year, according to data from the Centers for Medicare & Medicaid Services.

Residents of Alabama, Arizona, Delaware, Kentucky and Virginia can expect similar discounts. In 11 more states plus the District of Columbia, premiums will fall by less.

The program covers annual preventive care without a deductible, though beyond that total out-of-pocket expenses, including deductibles and co-pays, range to as much as $6,000 to $7,000 a year. And in many states, anyone who wants coverage will need to provide a doctor’s note, rather than a letter from an insurance agency denying coverage.

Critics say it doesn’t go far enough. Even with the lower premiums, the insurance will be expensive. By contrast, the average employee contributes about $75 a month for employer-sponsored coverage. And anyone who wants to qualify must first go without any coverage at all for the last six months.

For someone who loses a job and hopes to find another one, there is a tough choice: At about $430 a month on average, Cobra benefits can be significantly more costly than the government-sponsored coverage. But foregoing insurance for six months is also risky, especially for someone with a pre-existing condition that may require urgent and high-priced care.

Those factors contribute to concerns about the program’s reach. Before it was launched in 2010, the CMS’s Office of the Actuary anticipated 375,000 people would sign up within the program’s first six months; a year later, fewer than 22,000 have.

Linda Blumberg, a senior fellow in the health-policy center at Urban Institute, a nonpartisan think tank, says the low enrollment likely reflects the lack of premium assistance for those with low incomes, high cost-sharing requirements, the six-month wait and the need for additional outreach.

A spokesman for CMS, which oversees the program, says the lower rates will be comparable to state averages for healthy people, and enrollment should rise after the premiums fall—participation has jumped 70% since February, when the program made an initial round of rate cuts.


7 Responses to Another Pricing Test for Insuring People With Pre-Existing Conditions

  1. Admin on November 11, 2011 at 4:43 pm

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  7. Lou on April 17, 2012 at 7:45 am

    As Mitt Romney tries to distance himself from Obamacare, he ran into some trouble last night when he got stumped by comedian Jay Leno. Leno asked Romney what he would do to help people with preexisting medical conditions, who are often denied coverage today by insurance companies worried about increased costs.

    Romney’s answer was essentially nothing. Someone who has forgone insurance doesn’t deserve to get medical coverage, Romney suggested, because, “we can’t play the game like that.” Asked what he would do to help people with pre-existing conditions,