Good Neighbor Insurance (www.gninsurance.com and dev.gninsurance.com) is continuing to update our clients on the new health insurance laws. There are six major coverage options for those in the US and even though some of the rules and regulations are similar for all many differences are there and it all depends on how old you are and for whom you work. Many critical details of this new insurance law will be clarified in the months and years to come.
These six major coverage options are:
(1) Individual or family coverage
(2) Employee/employer group option for small businesses (typically under 50 employees)
(3) Employee/employer group option for large businesses (typically larger than 50 employees)
(4) Exchange options through the state you are residing in (fully integrated 1-1-2014 and are quasi-government and private insurance coverage combined)
(5) Medicare (which include Parts A, B, C, and D) for those 65 years onwards
(6) Full government health plans like Medicaid, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service.
What is PCIP (pre-existing condition insurance plan) also known as the government high risk insurance pool?
PCIP was created as part of the Affordable Care Act. The PCIP program provides a new health coverage option for you if you have been uninsured for at least six months, you have a pre-existing condition or have been denied health coverage because of your health condition, and are a U.S. citizen or are residing here legally.
What benefits will high-risk pool enrollees receive?
The high-risk pools will cover a range of benefits, including primary and specialty care, hospital care and prescription drugs. The health plans will be required to cover pre-existing medical conditions upon enrollment. The high-risk pool programs must cover at least 65% of the health care costs for a standard population.
How will the high-risk pool be funded and administered?
The health reform law allocates $5 billion to administer the national high-risk pool. This funding will go toward health care claims and administrative costs that exceed the premiums collected for the high-risk pool. On April 2, 2010, U.S. Department of Health and Human Services Secretary Kathleen Sebelius issued a letter that gives states the following options for operating the temporary high-risk pool: (1) Operate a new high-risk pool alongside an existing state high-risk pool; (2) Establish a new high-risk pool if the state does not currently have one; (3) Build upon other existing coverage programs designed to cover high-risk individuals; (4) Contract with current HIPAA insurance carriers or insurers of last resort to provide subsidized coverage; or (5) Do nothing, in which case the U.S. Department of Health and Human Services would carry out the coverage program in the state.
When does the high-risk pool go into effect?
The federal high-risk pool will begin taking applications on July 1, 2010 and coverage will begin on August 1, 2010. States operating their own high-risk pools will also aim to begin coverage relatively soon, but may not all meet the August 1 date for coverage. The high-risk pools will terminate on January 1, 2014 when the state-based American Health Benefit Exchanges are established and other insurance market reforms go into effect, providing new coverage options for people with pre-existing health conditions.
Given that this is a temporary form of coverage, what happens to people when the high-risk pool terminates in 2014?
When the temporary national high-risk pool terminates on January 1, 2014, high-risk pool enrollees will transition into receiving health coverage through the state-based American Health Benefit Exchanges. Procedures will be developed to ensure that there are no lapses in coverage. Individuals without employer health coverage and small businesses with up to 100 employees will be able to purchase coverage through the Exchanges. Premium and cost-sharing subsidies will be available for individuals with incomes between $14,404 – $57,616 and for families of four with incomes between $29,327 – $88,200. People will also be able to choose to purchase coverage in the individual market. As of 2014, insurers will not be able to deny adults coverage or charge higher premiums based on health status.
Who is eligible for coverage through PCIP?
Eligible individuals must:
- Be a U.S. citizen or a legal resident
- Have a pre-existing medical condition
- Not have been covered under creditable health coverage (as defined by Section 201(c)(1) of the Public Health Service Act) for the previous six months before applying for coverage
How is the PCIP funded?
The program is funded entirely by the federal government. The health reform law allocated $5 billion for the program nationwide. Funding will go toward health care claims and administrative costs that exceed the premiums collected for PCIP.
How much will high-risk pool health coverage cost?
Premiums will vary depending on the state you live in and which health plan you choose. To see rate information for the PCIP states administered by GEHA, click here to see the rates in each state, http://www.pciplan.com/applicants/rates.html.
For example, those who reside in Arizona would pay these premiums:
Here are the 2011 monthly PCIP premium rates for Arizona by the age of an enrollee.
|Age||Standard Option||Extended Option||HSA Option|
|0 to 18||$174||$234||$181|
|19 to 34||$261||$351||$271|
|35 to 44||$313||$422||$325|
|45 to 54||$400||$539||$416|
The premium cost for high-risk pool coverage will be established for a standard population in the non-group market and will not be based on the health status of enrollees. Premiums will be allowed to vary by age (by a 4 to 1 ratio), geographic area, and family composition. Premiums for the high-risk pool operated by the federal government will be available on July 15, 2010. Yearly out-of-pocket costs will be limited to $5,950 for individuals and $11,900 for families, excluding premiums.
What you pay for care / Schedule of benefits
This web page, http://www.pciplan.com/forms/pdfs/2011BenefitsSummary.pdf , explains in detail the 3 options you may choose from.
PCIP enrollees can choose from three plan options, with different levels of premiums, calendar year deductibles, prescription deductibles and prescription copays. The HSA Option provides an opportunity to open a Health Savings Account, a tax-exempt account where you can deposit funds for eligible medical expenses.
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