The Obama administration is extending a transitional Affordable Care Act program that covers over 100,000 sick Americans to give them more time to sign up for new health plans through Obamacare, Department of Health and Human Services (HHS) officials announced on Thursday.
The $5 billion Pre-Existing Condition Insurance Plan (PCIP) was meant to be a bridge program that offers coverage to Americans with pre-existing conditions who don’t get insurance through their employers — and can’t find it on the individual insurance market — until Obamacare provisions barring insurers from denying coverage based on a person’s health status take effect.
PCIP was slated to expire at the beginning of 2014. Enrollees will now be able to remain in the state-based “high risk pools” through the end of January, giving them more time to select plans through Obamacare’s insurance marketplaces (where they can’t be turned away). Media reports have indicated that these individuals might otherwise have fallen into a coverage gap because ongoing problems with the state and federal online Obamacare portals have prevented many from enrolling in new health plans. Americans who want insurance coverage that takes effect on January 1 must enroll in a plan by December 23.
“Today, as part of our efforts to smooth the transition to the Marketplaces for those seeking coverage that begins in January, we are taking steps to ensure that Americans enrolled in the federal PCIP insurance plan will not face a lapse when the new year begins,” wrote Centers for Medicare and Medicaid Services (CMS) in an email to reporters.
Patient advocates hailed the decision as a necessary precaution that ensures the sickest Americans won’t be left to pay hefty medical bills out of their own pockets while they shop for new coverage.
“Extending the Pre-Existing Condition Insurance Plan will give tens of thousands of people with a history of cancer or another serious disease the security of knowing they will not face a costly gap in coverage on Jan. 1 if they cannot enroll in a marketplace plan by Dec. 23,” wrote the American Cancer Society (ACS) in an email.
High risk pools are a staple of conservative health reform proposals as a means of covering Americans with pre-existing conditions. Top congressional Republicans even wrote a letter to President Obama demanding an expansion of PCIP in March.
But these pools are extremely expensive because they are comprised exclusively of sick patients who are costly to cover. In fact, PCIP came in significantly over budget despite enrolling far fewer people than originally projected. By contrast, Obamacare’s insurance marketplaces keep premiums in check by encouraging a mix of sick and healthy people that helps spread risk. That mix of the sick and the healthy is also part of the way that employers are able to keep their health costs down.
On Thursday afternoon, HHS officials announced several other deadline changes aimed at making sure consumers who want coverage on January 1 can get it and that people who have had their plans canceled and are looking for new coverage don’t experience major disruptions. Americans now have until December 31 to pay their first month’s premium and get January coverage, and the administration is encouraging insurers to accept late and even partial payments for January. Furthermore, insurers are being “strongly encouraged” to refill prescriptions that were covered under consumers’ older plans in January and to treat out-of-network providers as if they were in-network in the case of severe illnesses and injuries for that month.