Reform Alert - News from the Blues' Office of National Health Reform

Pre-Existing Condition Insurance Plan (PCIP) announces closure to new enrollment

Update: May 29, 2013 — Pre-Existing Condition Insurance Plan Program Interim Final Rule

Update: Dec. 30, 2013 — Pre-Existing Condition Insurance Plan extended

March 4, 2013

On February 15, 2013 the Center for Consumer Information and Insurance Oversight (CCIIO) suspended new enrollment in the PCIP program effective immediately in the 23 states and the District of Columbia where the federal government runs the program. Suspension will take effect by March 2, 2013 for state-run PCIP programs. The government is suspending new enrollment due to high-cost concerns. Despite the relatively low enrollment, the program’s overall costs were high because many of the patients had higher-than-anticipated medical bills.

The PCIP program was originally scheduled to end December 31, 2013, when coverage will be available to high-risk populations through Health Insurance Marketplaces that will no longer permit exclusions for pre-existing conditions.

More than 135,000 individuals - slightly more than one-third of the 375,000 people initially projected to sign up - enrolled in the plans after the program began in the summer of 2010. One reason why enrollment was lower than anticipated is that the federally authorized program requires people to be without insurance for six months.

People with pre-existing conditions will be able to apply for health coverage through the new marketplaces beginning with open enrollment on October 1, 2013.

The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.