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The Pre-Existing Condition Insurance Plan – Success or Boondoggle?

 

By Mark L. Horn, MD, MPH, Chief Medical Officer, Target Health Inc.

 

A progress report from the Center for Consumer Information and Insurance Oversight (CCIIO) on an element of the Affordable Care Act (ACA) was issued this week and seemed to attract less attention than typically accrues to ACA matters. Perhaps some have forgotten, but the ACA created a temporary mechanism for uninsured patients with pre-existing conditions to secure health coverage prior to 2014 when the ACA established Insurance Exchanges, mandating that all insurers cover pre-existing conditions, become operational. The idea is straightforward, there are many Americans who, due to job loss, disability, financial distress or simple bad luck find themselves uninsured, and among this group there is a doubly unfortunate segment that has a pre-existing significant health problem. This combination of events creates a potentially unsolvable and financially ruinous problem, uninsurable health costs.

 

Since this dilemma, widely known and lamented, was intensively discussed during the health reform debates, it’s surprising that this report has not received more attention. The program, labeled the Pre-Existing Condition Insurance Plan (PCIP) is operational, and will have enrolled nearly 50,000 people in either federally or state run (it is structured on a ‘Federalist’ model) PCIPs through December, 2011.

 

The demographics of the enrollees suggest that the program has attracted, as presumably was anticipated, individuals who for a variety of reasons are unable to secure employer coverage and are too young for Medicare, a population long recognized as especially vulnerable to the coverage ?cracks’ in our health system. Among medical needs covered, and specifically cited in the report, are cancer, circulatory disorders, and rehabilitative care including “certain forms of radiation and chemotherapy“. Among criticisms: the current anticipated cost of coverage, nearly $29,000 per member/per year, is significantly higher than the $13,000 estimated in November 2010. The report notes that this reflects the significant and severe medical needs of this especially vulnerable population.

 

What are we to make of this?

 

To this observer, it is hard to call this anything but a success. A highly vulnerable population without viable insurance options has been defined, and a mechanism of insuring them at rational premiums (e.g. prices they can manage) has been devised. There is no suggestion in the report that the cost overruns emanate from anything other than legitimate medical expenses; finally, coverage, while ‘actuarially’ subsidized is not free, e.g. premiums are charged and paid.

 

This seems a particularly American solution, effective, pragmatic, (and imperfect), to a serious social problem affecting a clearly vulnerable group of people. Its imperfections are non-trivial, among these its expense; nevertheless for many it apparently successfully addresses a critical problem. As citizens, we should be proud of, and grateful for, this success.

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