The U.S. Department of Health and Human Services (HHS) today announced new steps to reduce premiums and work with licensed health insurance agents and brokers to make it easier for Americans to enroll in the federally administered Pre-Existing Condition Insurance Plan (PCIP). Beginning this fall, HHS will begin paying agents and brokers for successfully connecting eligible people with the PCIP program. NAHU has been lobbying for this change to PCIP since the federal fallback program rules were first announced in July 2010. NAHU staff met with PCIP officials this afternoon to obtain more details about the new changes to the program.
PCIP’s target is to begin compensating licensed agents and brokers by October 1, 2011, and they will pay a flat fee of $100 per enrolled applicant. It is possible the program will able to formally work with agents sooner, depending on how soon Paperwork Reduction Act requirements can be met, since the inclusion of agents and brokers will necessitate minor changes to the program application. The majority of state-administered PCIP programs already utilize the services of licensed health insurance agents and brokers and compensate them for their services. The average state-based program fee for agents is $85 per enrolled applicant.
In addition, HHS announced that they will make PCIP enrollment easier for both agents and uninsurable individuals by allowing an applicant to get a certification from their physician that they have been diagnosed with a catastrophic medical condition, rather than supplying coverage denial letters. Furthermore, HHS is planning on dropping PCIP premiums by as much as 40 percent in 18 states to help bring PCIP premiums closer to the rates in each state’s individual insurance market. In the six states where PCIP premiums were already well-aligned with state premiums, premiums will remain the same. HHS is also working with insurers to notify people about the PCIP option in their state when their application for health insurance is denied.
To find a chart showing changes to PCIP premiums in the states with federally-administered PCIP programs, click here.