May 31, 2013 No Comments ›› Darby Crash
(CNSNews.com) – A pre-existing condition health insurance program established by Obamacare is already straining its own budget and, to control costs, the administration’s Health and Human Services Department (HHS) has stopped enrolling any new people in the program, according to an audit by the General Accountability Office (GAO).
In addition, to further control spending, HHS has directed the program to shift more of the costs onto the current enrollees, thus raising the out-of-pocket health care expenses for the people with pre-existing conditions.
“Finally, due to growing concerns about the rate of PCIP [Pre-existing Condition Insurance Program] spending, in February 2013, CCIIO [under HHS] suspended PCIP enrollment to ensure the appropriated funding would be sufficient to cover claims for current enrollees through the end of the program,” states the GAO report, Patient Protection and Affordable Care Act: Enrollment and Spending in the Early Retiree Reinsurance and Pre-existing Condition Insurance Plan Programs.
The rationing or denial of health care coverage in the marketplace for people with pre-existing conditions, or insurers charging higher premiums to people with pre-existing conditions were among the reasons cited by President Barack Obama and most congressional Democrats for implementing Obamacare, the Patient Protection and Affordable Care Act.
“This year, tens of thousands of uninsured Americans with preexisting conditions, the parents of children who have a preexisting condition, will finally be able to purchase the coverage they need. That happens this year,” said Obama when he signed the Affordable Care Act into law on Mar. 23, 2010.
“This year, insurance companies will no longer be able to drop people’s coverage when they get sick,” said the president.
As Obamacare went into effect, two temporary programs were established in March 2010, the Early Retiree Reinsurance Program and the Pre-existing Condition Insurance Plan (PCIP) program. Each program is supposed to operate through Dec. 31, 2013, after which their respective enrollees are supposed to transition into the health insurance Exchanges established by Obamacare.
Each program was allotted $5 billion.
Retirees and people with pre-existing conditions, said the GAO, “historically have faced challenges obtaining health insurance in the individual market due, among other things, to being charged higher premiums than younger or healthier individuals on the basis of age or health status, or to being denied coverage altogether.”
The Pre-existing Condition Insurance Plan (PCIP) is overseen by the Center for Consumer Information and Insurance Oversight (CCIIO), which is part of the Department of Health and Human Services, which is headed by Secretary Kathleen Sebelius.
To be eligible for the PCIP, “individuals must have a pre-existing condition and have been without creditable coverage for at least 6 months prior to application,” explained the GAO. That limits “the program to individuals who likely have been unable to access insurance because of their pre-existing condition.”
The $5 billion for the PCIP is distributed state-by-state based upon population, the number of uninsured people, and variations in the cost of care by location.
The PCIP programs cannot impose waiting periods for coverage “based on the enrollee’s preexisting condition, and plan benefits must cover at least 65 percent of the total cost of coverage until enrollees hit a statutory out-of-pocket spending limit, at which point PCIP covers 100 percent of the cost,” said the GAO.