The End of the Pre-Existing Conditions Insurance Plan

What You Need to Do If You Were In ObamaCare's PCIP

The End of the Pre-Existing Conditions Insurance Plan
May 14, 2014

One of the main objectives of the Affordable Care Act (ACA) was to make sure that nobody with a pre-existing condition could be denied coverage or treatment, or charged higher rates, based on that condition.

This is arguably the most popular element of the ACA (aka ObamaCare) with consumers, but it posed a problem for insurers. They could be forced to absorb these higher costs without raising premiums or immediately spreading the higher costs over healthier consumers.

The ACA's compromise was to delay the requirement for pre-existing conditions until December 2013, and to create the Pre-existing Conditions Insurance Plan (PCIP) as a stopgap measure until the exchanges were running and people could transition to one of the new plans.

The PCIP began coverage on Aug 1, 2010, and was scheduled to end with the creation of the exchanges. Funding is nearly exhausted, and all new PCIP applications were ended in early 2013.

If you were in the PCIP program, you should have already signed up for health insurance under one of the new plans. But what if you decided new plans were too expensive, or you missed the signup window? All PCIP benefits expired on April 30th – and while deadlines can be anywhere from fuzzy to meaningless in the ACA, it is reasonable to expect this deadline will stick.

What options do you have? Thanks to a recent notice from CMS (Centers for Medicare and Medicaid Services), you will have more time to enroll even though the window has passed.

CMS has defined loss of PCIP coverage from the program shutdown as "exceptional circumstances", which allows HHS (Department of Health and Human Services) to extend the enrollment period for PCIP participants. However, you need to act fairly soon.

You now have until June 30th, 2014, to complete the application for enrollment without having a gap in coverage, as your coverage will be retroactive to May 1st. The PCIP website says that you can enroll in a plan on the exchange at any time through the special enrollment period, and those still in the PCIP are scheduled to receive a letter outlining the next steps.

Contact the Federal Marketplace Call Center to start the application process. States are expected to create a similar extension, although it would be best to check with your state exchange to verify this.

When examining your options, check drug benefits and other components of individual plans carefully, because these are still in flux. For those with pre-existing conditions requiring expensive medications or medical equipment, it is extremely important that you verify the coverage for your specific needs.

What if you still don't like your options in the exchanges? Unfortunately, there are few, if any, options until the next enrollment window – unless you qualify for Medicare. By the time you read this, all of the state high-risk pools are likely to have been dissolved. Besides, if you do not like your options now, you will probably like them even less at the next signup.

Short-term or catastrophic insurance plans do not meet the minimum ACA care standard – thus they can still exclude for pre-existing conditions. Even if they do not, you will still have to pay the penalty for a non-compliant policy.

The bottom line is that if you are still in PCIP, use this new window to sign up for your best option of one of the regular plans on the exchange – or prepare to be left out.

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