HHS to Cut Premiums for Patients with Pre-Existing Conditions

The U.S. Department of Health and Human Services (HHS) announced that it will cut premiums for patients with pre-existing conditions by about 20% in those states in which it operates its Pre-Existing Condition Insurance Plan.  In addition, HHS will ask those states that operate the program on their own to cut coverage rates as well.

The impending premium cuts are an almost unheard-of response by the federal government to the disappointing enrollment in its stopgap health plans for patients with pre-existing conditions.  Enrollment in the program has lagged far behind initial projections that approximately that 200,000 Americans would be enrolled by 2013. Despite the $5 billion in funding provided by the government, little more than 8,000 people have enrolled in the plan nationwide.  The government will subsidize the program until 2014 when the program ends.  At that time, insurers will no longer be able to discriminate based on a person’s health status.

Not surprisingly, enrollment appears to be linked in part to state premiums.  Pennsylvania, which charges one of the lowest rates in the country, has more than 1,600 enrollees—more than 20% of the nationwide total and 1,000 more than any other state. Pennsylvania is also the only state to charge the same rate regardless of age.  By contrast, Missouri charges premiums that start at 50% more than the Pennsylvania rate and to date, only 101 residents have enrolled in the program.

To be eligible for the new program, you must have been uninsured for at least six months and have a pre-existing condition.  Most states require applicants to show proof that they’ve been rejected for coverage by a private insurer within the past six months or been denied coverage for certain benefits.   At least a dozen states, including Pennsylvania, give applicants the option to provide a doctor’s note as proof they have a pre-existing condition such as cancer or rheumatoid arthritis.