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Pre-Existing Condition Insurance Plan: Health Department Unveils Program That Could Help 350,000 Uninsured

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The Department of Health and Human Services on Thursday unveiled a new program called the Pre-existing Condition Insurance Plan to provide insurance for people who are uninsurable due to such conditions.

The department estimates that the program could cover 350,000 of the four million people uninsured due to pre-existing conditions through 2013.

The new health care law does not prohibit the health insurance industry from discriminating against the sick until the beginning of 2014, but as of Thursday, U.S. citizens who have been uninsured for six months because of pre-existing conditions will be eligible to apply for the PCIP immediately. And coverage could start as soon as August in the 21 states where the federal government is administering the program itself, according to the HHS. Twenty-nine state governments and the District of Columbia will run the plan themselves.

The health care reform legislation signed into law on March 23 gave HHS 90 days to start its "temporary high-risk pool." The department missed the deadline last week and little information was available to potentially eligible people about how to apply. But Thursday's rollout, timed to coincide with the beginning of state fiscal years, includes a new website -- www.healthcare.gov -- where the uninsured with pre-existing conditions can find information on how to apply for the new program.

"Health coverage for Americans with pre-existing conditions has historically been unobtainable or failed to cover the very conditions for which they need medical care," said Jay Angoff, director of HHS's Office of Consumer Information and Insurance Oversight, in a statement.

"The Pre-Existing Condition Insurance Plan is designed to address these challenges by offering comprehensive coverage at a reasonable cost. We modeled the program on the highly successful Children's Health Insurance Program, also known as CHIP, so states would have maximum flexibility to meet the needs of their citizens."

Angoff and OCIIO's Richard Popper emphasized on a conference call that the program would serve as a temporary bridge for the uninsured through 2014, when "exchanges" are supposed to offer a range of affordable plans from which consumers can choose.

There are roughly four million people currently uninsured because of pre-existing conditions, but the program will probably reach at least 200,000 people "at any one time," Popper said.

"In terms of total individuals served, it will be well more than 200,000 because some people use high-risk pools for temporary coverage until they move on to something else and get a job," he said. "We'll probably be looking at covering a total of 350,000 individuals, who will go through the plan over the course of the the next three and a half years."

The average monthly premium for participants in the new program will vary by state and will range within states from $140 to $900, said Popper. The PCIP is designed to be more affordable than the existing high-risk pools currently operated in 35 states, which reach 200,000 people, often excluding coverage of certain conditions.

Congress allocated $5 billion for the new program, which the Congressional Budget Office estimated would allow it to cover 200,000 people. The CBO estimated that without the $5 billion cap, the temporary program would reach 700,000 people at a cost of $15 billion.

A reporter asked if HHS would limit enrollment in the program to stay under the $5 billion cap, which the health care law gives the health secretary the authority to do. "We don't see that happening any time soon," said Popper.

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