Help is on the way for those who can’t get medical insurance
Last month, California joined the ranks of states that have created a federally funded health plan for people who are medically uninsurable. All states either have a plan or will have one soon.
California’s Pre-Existing Condition Insurance Plan was mandated by the Affordable Care Act, the federal healthcare reform passed this year by Congress. It is designed to provide coverage to people who cannot get private insurance due to preexisting conditions. The plan will be in place through 2014, when private insurers will be required by law to provide insurance to everyone, regardless of their prior health issues.
California and many other states already provide and subsidize some sort of high-risk health insurance. The new plans will be funded with federal dollars and be run either by the states or, if the states prefer, by the federal Department of Health and Human Services. These plans are meant to be less expensive, have fewer restrictions and offer better benefits than the current state plans.
The benefits are “similar to what state employees get in California — it is a comprehensive, robust health plan,” says Jeanie Esajian, deputy director of legislative and external affairs for the Managed Risk Medical Insurance Board in Sacramento.
The federal Pre-Existing Condition Insurance Plan is offered only to individuals who don’t have insurance through an employer or through COBRA plans (the group health insurance extended to individuals who leave their jobs) and cannot qualify for other programs such as Medicare or Medicaid. It is open to California residents who are U.S. citizens and have Social Security numbers. Individuals can’t have been insured under another plan during the previous six months.
Two types of people can qualify for the federal plan. The first is those who have preexisting conditions that prohibit them from getting private insurance. (A person can prove this with a rejection letter from an insurance provider dated within the last year.) The second is people accepted for private insurance but who face premiums higher than those offered by the state insurance programs.
Both the state and federal plans are overseen by the Managed Risk Medical Insurance Board. But there are distinct differences between them. Here are some points to consider:
• The federal insurance is a PPO (preferred provider) plan. The state offers three options run through Anthem Blue Cross PPO, Contra Costa Health Plan or Kaiser Permanente.
• The federal and state plans have an out-of-pocket maximum of $2,500, meaning an insured individual would not have to pay more than that over the course of a year.
• The annual deductible for the federal plan is $1,500, while it is $500 for each of the state’s three options. This is the amount the insured has to pay before the health insurance begins contributing to the costs.
• The annual deductible for brand-name prescriptions under the federal plan is $500 and the cost of medications ranges from $5 to $30 after the deductible is met. There is no annual deductible for medications in the state plan, and the cost of the medications varies.
• The federal plan has no annual or lifetime benefit caps, meaning it will not cut off a person’s payments once they incur a certain amount of costs. The state plan ends coverage at $75,000 per year and $750,000 over a lifetime.
• The federal plan has no exclusion period for covering preexisting conditions, while the state plan excludes coverage of these conditions for three months.
• Preventive care (things like immunizations and routine physical exams and screenings) is free under the federal plan. In the three state plans, some services are free and some cost up to $20.
• There is a $25 co-payment for doctor’s visits in the federal plan. The fees in the different versions of the state plan vary.
• The federal plan is available only for individuals, but the state plan covers families.
• To apply for either plan, an individual must fill out applications for both plans. These can be found online at https://www.pcip.ca.gov/Downloads/ or by calling (877) 428-5060. The medical insurance board in Sacramento then assesses the applicant’s situation to see if he or she is eligible for one or both of the plans. If an applicant is eligible for both, he or she can pick either one.
• Individuals pay monthly premiums for the plans. Overall, the federal option is more affordable than those offered by the state. The federal plan is prohibited from having higher premiums than private insurance. But state law requires that premiums for the state plan be 25% to 37.5% higher than what someone would pay on the private market, Esajian says.
• Unlike with private insurance, the only factors that determine the cost of premiums for the federal plan are age and where a person lives. The prices for the federal plan range from $127 for someone younger than 15 living in Ventura County to $999 for someone who is 74 or older living in Los Angeles, the most expensive region in the state.
The state has already received about 500 applications for the federal plan. And there is plenty of funding for the program — an actuarial assessment in May found that the federal allocation of $761 million through 2013, coupled with premiums, would accommodate 17,000 to 23,000subscribers at any given time, Esajian says.
