The U.S. Department of Health and Human Services (HHS) is revamping its struggling Pre-existing Condition Insurance Plan program by implementing commission payments for agents and brokers who help individuals enroll.
In addition, HHS also plans to ease eligibility standards and cut the cost of participating in the program, officials say.
The PCIP provision of the Patient Protection and Affordable Care Act of 2010 (PPACA) was supposed to provide immediate relief for uninsured people with health problems, to help fill the gap until insurers start selling subsidized coverage on a guaranteed issue, mostly community-rated basis in 2014.
PCIP is supposed to provide comprehensive health coverage for people with health problems for a price similar to the price of ordinary individual commercial health coverage. Eligibility is not based on income, and the risk pools cannot charge higher rates for people with more severe health problems.
Within the PPACA, Congress let states choose between running PCIP risk pools themselves or letting HHS provide PCIP risk pool services for their residents. HHS now provides PCIP services in 23 states and the District of Columbia.
At the time the PPACA was passed many critics predicted that millions of uninsured Americans with health problems would flock to enroll in the program. Rather than running out of PCIP funding, states have met program goals.
As of March HHS officials estimate the program had a total of only about 18,000 enrollees nationwide.
HHS also is easing the application process in the 24 jurisdictions with federal PCIP services.
An important change effective July 1, allows people applying for coverage to simply provide a letter from a doctor, physician assistant, or nurse practitioner dated within the past 12 months stating that they have or, at any time in the past, have had a serious medical condition, disability, or illness. Applicants will no longer have to wait for a health insurance company to send them a denial letter, officials say.
HHS also has sent letters today to the 27 states that run their own programs to let them know they can adjust their PCIP premiums, officials say.
Janet Trautwein, chief executive officer of the National Association of Health Underwriters (NAHU), Arlington, Va., has welcomed the HHS announcement. “NAHU is thrilled,” Trautwein says. “NAHU supports that new PCIP program as a means of getting more people with serious health conditions covered in the most efficient means possible.”
The producer compensation changes will help NAHU members educate potential beneficiaries about the program and encourage enrollment, Trautwein says.
What this Might Mean Going Forward
Its possible that this change bodes well for inclusion of agent / broker commissions within the Medical Loss Ratio rules going forward. At this point agent commissions have been exempted from inclusion in the costs included in the medical loss ratio calculation which has resulted in drastic reductions in agent/ broker commissions since the beginning of 2011. It would be a major change if this payment of agent commissions for PCIP enrollees results in the much bigger change in the MLR. I doubt that this will extend to the MLR, but agents do at least have a glimmer of hope.
