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Professional NewsFull Access

Reasons for Lower-Than-Expected Enrollment in PCIPs

Published Online:21 Oct 2011https://doi.org/10.1176/pn.46.20.psychnews_46_20_12_2

The following is from the GAO report "Pre-Existing Condition Insurance Plans: Program Features, Early Enrollment, and Spending Trends and Federal Oversight Activities."

  • Statutory requirement that applicants be uninsured for six months. Forty-five percent of denials for state-run preexisting condition insurance plans (PCIPs) and 69 percent of denials for the federally run PCIPs were due to the applicant having creditable health coverage within the previous six months. Other individuals likely did not apply because they had creditable coverage within the prior six months and knew they were not eligible.

  • Affordability concerns. Premiums for PCIPs were required to be set at 100 percent of the standard market rate and averaged $407 a month in June. This is likely to be unaffordable for many. On May 31 the Department of Health and Human Services announced it would reduce PCIP premiums in 18 states that have opted to use a federal PCIP plan beginning July 1, which may have improved the affordability in those states.

  • Lack of awareness of the PCIP program. The quick roll-out of the program allowed little time to focus on marketing and outreach, and the initial focus was on avoiding enrolling more individuals than the plan could support. The segment of the uninsured population with preexisting conditions has been difficult to identify and target.

  • Processes used for determining eligibility. Applicants for federally run PCIPs had only two options to demonstrate their preexisting condition through June, whereas most state-run PCIPs allowed three or more options. Most notably, the federally run PCIPs did not use a preexisting condition list and required applicants to provide proof of denial or an offer of coverage with an exclusionary rider from another insurance carrier, which could have imposed an additional burden.

  • Existing state laws or state-supported health insurance programs without preexisting condition limitations. PCIP enrollment has likely been affected by state health insurance laws. For example, five states—Maine, Massachusetts, New Jersey, New York, and Vermont—have guaranteed-issue laws that prohibit health insurance denials based on health status or medical condition, which may have contributed to low PCIP enrollment in those states.