Health Insurance for High Risk People: Interim Final Rule - August 4, 2010
Health Insurance for High Risk People: Interim Final Rule Establishes Coverage Guidelines
August 4, 2010
Randolph B. "Randy" Fenninger- Washington
Health insurance coverage offered in the new high risk pools for people with pre-existing conditions will be available at the same monthly premium rate paid by an average person without health problems under an interim final rule issued July 29 by the Department of Health and Human Services. The interim final rule was published in the Federal Register July 30, 2010, and comments are due within 60 days.
The rule implementing the Pre-Existing Condition Insurance Plan Program (PCIP), established in the Affordable Care Act, lays out the specifications for the $5 billion federally-funded program, which provides coverage for people until 2014 that have been uninsured for at least six months and unable to obtain health coverage because of health conditions. The HIPAA definition of pre-existing condition was used. The federal government has estimated that the high risk pool program could cover between 200,000 and 400,000 people.
Provisions in the interim final rule will allow alternative formulas to be devised by the nine states that require insurers to issue policies to all applicants or that prohibit health status from being a factor in setting premiums. The program will be in effect until 2014, at which time health insurance exchanges will be in place for individuals and insurance cannot be denied to anyone with pre-existing conditions.
Out-of-pocket expenses for people covered under policies in the high risk pools cannot exceed $5,950 in 2010, the same limit as high-deductible policies, the interim final rule stated.
The rule describes:
- the options for determining who has a pre-existing condition
- how to verify citizenship
- how to appeal PCIP decisions
- how federal funding will be allocated
- ways to prevent “dumping” people who have insurance into the program
- strategies for preventing fraud
- benefits under the program, including hospitalization, outpatient care, maternity care, hospice and home health care
Twenty-eight states and the District of Columbia have elected to operate their own high risk pools, while 22 states have elected to have the federal government set up the program in their state.
The list of services not covered, including abortion, parallels the Federal Employees Health Benefits Plan.
Concerns that the $5 billion appropriated to pay expenses for the high risk pools is inadequate were cited by many of the states that elected not to set up their own high risk pools but instead let the federal government operate them in their states, according to a July 28 Congressional Research Service study, Temporary Federal High Risk Health Insurance Pool Program. The study cited projections made by Richard Foster, chief actuary of the Centers for Medicare & Medicaid Services, that by 2011 or 2012 the $5 billion will be exhausted, resulting in substantial premium increases for those in the high risk pool which will be needed to sustain the program.
In addition, the Congressional Budget Office said in a June 21 letter to Sen. Michael Enzi (R-WY) that the funding will not be enough to cover the cost of all applicants through 2013.
To learn more about state participation, qualification standards and the application process visit the healthcare.gov website.
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