Question: Who is eligible for Pre-Existing Condition Insurance Plan?
Answer: To be eligible for the Pre-Existing Condition Insurance Plan,
You must be a citizen or national of the United States or reside in the U.S. legally.
You must have been without health coverage for at least the last six months. Please note that if you currently have insurance coverage that doesn’t cover your medical condition or are enrolled in a state high risk pool, you are not eligible for the Pre-Existing Condition Insurance Plan.
You must have a pre-existing condition or have been denied coverage because of your health condition.
What is a pre-existing condition?
A pre-existing condition is a condition, disability or illness (either physical or mental) that you have before you enrolled in a health plan.
Is the Pre-Existing Condition Insurance Plan (PCIP) available in every state?
Yes, every state has a plan that offers comprehensive health coverage for uninsured Americans with pre-existing conditions. The program name and other plan details vary depending on which state you live in and whether the program is run by the state or the Department of Health and Human Services. Check out the State Plans page to learn more about how the Pre-Existing Condition Insurance Plan works in your state.
When will my coverage be effective?
If we get your complete application, including all supporting documents, on or before the 15th of the month, your coverage will start on the first day of the next month. If we get your complete application, including all supporting documents, after the 15th of the month and on or before the last day of the month, your coverage will start the first day of the second month, unless you choose to have your coverage start on the first day of the next month. If we approve your application, we will let you know how to choose an earlier effective date. Coverage always begins on the first day of the month. Example:
We get your complete application and supporting documents on …
Your coverage starts …
May 1 or April 1 (if you ask for coverage to start sooner)
May I apply for the Pre-Existing Condition Insurance Plan if I have existing health coverage?
You are not eligible unless you have been without health coverage for at least the last 6 months. For example, if you have Medicare or TRICARE, you shouldn’t apply. Also, if you have coverage provided by a state high risk pool or insurance coverage that may not cover a pre-existing medical condition, you shouldn’t apply. If you are uninsured and have been told that you may be eligible for other coverage programs like Medicaid and the Children’s Health Insurance Program, you should check out those programs first, as they may better meet your needs. If you have job-based coverage, or individual insurance coverage, you aren’t eligible to apply.
May I apply for the Pre-Existing Condition Insurance Plan if I have COBRA or other continuation of coverage?
No, even if your COBRA or other continuation of coverage is about to run out, you won’t be eligible until you have been without health coverage for at least the last 6 months, and meet other eligibility criteria.
I currently have insurance that excludes coverage for my pre-existing condition. Am I eligible for this program?
No. To be eligible for the Pre-Existing Condition Insurance Plan, you must have been without other health coverage for at least 6 months from the date of application.
What health care providers are in the network?
The Pre-Existing Condition Insurance Plan will have provider networks that include a full range of services and specialists. You can search for participating providers at www.PCIPlan.com.
Is there a cost for this coverage?
If you are eligible for the Pre-Existing Condition Insurance Plan, you pay a monthly premium for your coverage and other cost-sharing. To see the premium rates for your state, go to State Plans.
What do I do if I can’t afford these premiums?
If you have limited income and resources, you may be eligible for the Medicaid program in your state. If you are seeking insurance coverage for your child, go to www.insurekidsnow.gov to learn more about children’s health insurance in your state.
What is going to happen to my PCIP coverage when the program ends in 2014?
The Pre-Existing Condition Insurance Plan is a transitional program that provides health coverage to people with pre-existing conditions. This program is available until 2014. In 2014, you will have access to affordable health insurance choices through a new competitive marketplace called an Exchange. An Exchange will provide a transparent and competitive insurance marketplace where individuals and small businesses can buy affordable and qualified health benefit plans. Exchanges will offer you a choice of health plans that meet certain benefits and cost standards. In addition, starting in 2014, it will be against the law for an insurance company to discriminate against you based on a pre-existing condition. If you are enrolled in PCIP, we will provide additional information about how your Pre-Existing Condition Insurance Plan coverage will change and how you can take advantage of the new coverage options available in 2014.
How do the lawsuits against the Department of Health & Human Services concerning the Affordable Care Act affect my PCIP coverage?
The Affordable Care Act remains the law of the land and we are continuing to carefully and effectively implement this law to improve the health of all Americans. The Affordable Care Act created the Pre-Existing Condition Insurance Plan, which is available to people who are U.S. citizens or residing here legally, have a pre-existing condition or have been denied health coverage because of their health condition, and have been without health coverage for at least 6 months. This program will be available until 2014. In 2014, you will have access to affordable health insurance choices through a new competitive marketplace called an Exchange. An Exchange will provide a transparent and competitive insurance marketplace where individuals and small businesses can buy affordable and qualified health benefit plans. Exchanges will offer you a choice of health plans that meet certain benefits and cost standards. In addition, starting in 2014, it will be against the law for an insurance company to discriminate against you based on a pre-existing condition. We recognize how important the Pre-Existing Condition Insurance Plan is to you and will let you know if there are any changes that could affect your coverage.
How will I know if my rates changed?
If you are a current PCIP enrollee, you will receive a letter in the mail stating the amount of your new premium at the beginning of June 2011. This letter will include the new premium amount effective July 1, 2011 and explain what to do if you have paid future months’ premiums and need a credit adjustment. To see the premium for your state effective July 1, 2011, go to State Plans and click on your state of residence.
Will I see any other changes to my benefits or out-of-pockets?
No. PCIP enrollees will continue to have a choice of three plan options – the Standard Plan, the Extended Plan, and the HSA Plan. Your benefits will remain the same. There will also be no changes to your out-of-pocket costs, such as deductibles, co-pays, and coinsurance.
Can I switch plans?
No. Current enrollees will not be able to switch plans at this time. However, if you live in a State where the premiums were reduced, you will see a decrease in premiums no matter what plan you are enrolled in.
If I paid my premiums for future months, will I get a refund?
If you paid your premiums for future months and your premiums will decrease as of July 1, 2011, PCIP will credit any overpayments towards your future premiums.
Why did the premiums change?
The PCIP program revised its premiums by considering current individual market premiums in each state in order to best serve those eligible for the PCIP program. This resulted in a premium reduction in some states where the federally-administered PCIP operates. As was the case before, premiums vary depending on the state you live. For example, the premium for a 50-year-old enrollee may range between $214 and $559. The previous 2011 premiums for a 50-year-old enrollee ranged between $320 and $570.
Why didn’t all enrollees get a premium change?
Premiums vary depending on the state where you live. This change takes into account the premiums currently charged by individual market insurers for similar benefits in each state, which generally varies from state to state.
The Patient Protection and Affordable Care Act created a monetary incentive for all taxpayers to obtain health insurance. Beginning in 2014, people without insurance will pay more to the IRS than people with insurance. Like the tax code as a whole, the rules for calculating the size of the penalty are incredibly complex. But once the penalty is fully activated in 2016, a single individual with no dependents will pay an extra $695, or 2.5 percent of his or her applicable income, whichever is higher. An uninsured family of four with annual income of less than $110,000 will typically pay $2,085 more than it would if insured.
This tax penalty is known as “the individual mandate.” It’s an important part of the new law because starting in 2014, insurers are prohibited from denying coverage or charging higher rates based on preexisting conditions. Without the mandate, people might wait to buy insurance until they needed medical care. To keep insurance affordable for patients and profitable for insurers, healthy people need to pay for coverage before they get sick.
Various courts have viewed the tax penalty in different ways. But some have concluded that it is a huge encroachment on individual rights. As a ruling from the U.S. 11th Circuit Court of Appeals put it, “This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy.”
This is the part of the debate that I find so curious. There is nothing novel or coercive about linking taxes to the purchase of specific types of goods or services. As any taxpayer probably knows, there are many tax provisions that raise or lower your tax bill depending on what you have bought and what you have elected not to buy.
“Obamacare” is unusual, perhaps even unique, in that it uses a penalty to encourage a purchase. Usually we use penalties to discourage a purchase and subsidies to encourage a purchase.
Obamacare flips this around, which is probably why people react to it so viscerally. We grumble when we pay excise taxes. We sigh when we see others getting tax breaks that don’t apply to us. But we roar when a penalty impels us to buy something we don’t want.
To my sober economist’s mind, however, there is little difference between a penalty and a subsidy. Either way, the government is rewarding or penalizing you depending on what you buy and what you don’t buy. And the resulting difference in taxes can be huge.
The most important of these provisions allows homeowners to deduct from their taxable income the money they spend on mortgage interest. For a typical homeowner, this can reduce taxes by hundreds or thousands of dollars. Those of us who choose to rent instead of buying with a mortgage from a bank are in effect penalized, and we pay this penalty every year of our lives until we either die or buy a house on credit.
Having spent half a day last April doing my family’s taxes, I’m all too aware of the other individual mandates built into our federal laws. Here’s a partial list of the specific purchases that my tax preparation software inquired about when it “interviewed” me while preparing my federal return: moving expenses, charitable contributions, student loan interest, tuition, safe-deposit fees, legal expenses, investment expenses, hobby expenses, hybrid cars, child care and, notably, medical expenses and health insurance premiums. Without this information about my retail activity, the IRS apparently couldn’t calculate how much money my family owed Uncle Sam for 2010.
In California, where we have both a state income tax and a sales tax, the list goes on. Californians are taxed differently depending on whether they buy low-emission vehicles, solar panels, California-grown rice straw, habitat restoration supplies for salmon and steelhead trout, and components to build the Joint Strike Fighter aircraft.
Every tax creates winners and losers. To evaluate whether a specific tax is good public policy, all we can do is judge whether it distributes the tax burden fairly and whether it creates positive economic incentives.
It makes sense for governments to use tax laws and other types of economic incentives to encourage behaviors that are good for society or that increase overall economic welfare, and to discourage behaviors that cause general economic harm.
When pundits oppose a particular economic incentive, they often refer to it derisively as “social engineering.” The label is apt because the legislator’s goal is indeed to engineer society by providing tangible monetary incentives that reward desirable behavior while penalizing behavior that harms the economy or other social goals.
By creating the insurance mandate, Congress intended to discourage a behavior it deemed harmful. Deadbeat patients who consume subsidized health care without paying into the system impose unfair costs on the rest of society.
At the same time, Congress intended to encourage behavior it deemed socially and economically desirable. According to a landmark study published in July, people chosen at random to receive Medicaid insurance in Oregon were already healthier just one year later. They also had fewer unpaid medical bills sent to collection agencies. Over time, people with health insurance will probably miss fewer days of work, spend less time on welfare and avoid defaulting on their debts through personal bankruptcy.
The bottom line: There really is no such thing as an individual health insurance mandate. No one gets carted off to jail if they fail to buy insurance, they got send for other reasons, but there are services in Sacramento that allow you to pay bail if this happen. Instead, they pay a tax penalty just like the tax penalties we face for other commercial decisions we make each day. Under Obamacare, Americans are free to choose whether or not to buy insurance, just as they are free to choose whether to buy a house, or solar panels, or hybrid cars, or child care or cigarettes. Let’s stop suggesting otherwise, and start referring to the individual health insurance incentive.