This summer, new health insurance programs aimed at people with preexisting medical conditions began accepting applications around the country. The plans target one of the key promises of the health-care overhaul: Everyone, even people with checkered medical histories that may make them uninsurable under the current system, can get coverage.
Now the plans are up and running in every state. So far, the response has been modest and reviews are mixed. For some, the new preexisting-condition insurance plans -- PCIPs, also known as high-risk pools -- have offered a lifeline that has enabled them to afford crucial treatment that they otherwise would have skipped or had to pay for themselves. Others, however, have been frustrated by strict eligibility rules that have shut them out of the plans, and still others find the coverage too expensive.
The pools are intended to act as a stopgap until the state-based health insurance exchanges created under the health-care overhaul are up and running in 2014. (At that time, anyone without affordable job-based coverage will be able to buy insurance on one of the exchanges.) For the period between now and then, the new law established a $5 billion insurance program for up to an estimated 6 million people with preexisting medical conditions.
Even before the federal overhaul was enacted, 35 states offered programs for people with preexisting conditions. But, from a consumer's point of view, those programs have several weaknesses, including premiums that can be up to twice as expensive as private coverage and waiting periods of up to a year.
The new pools are somewhat different. Premiums for the oldest participants can't be more than four times those that are charged to the youngest. The plans have to cover a comprehensive range of services, and preexisting conditions must be covered immediately. An individual's out-of-pocket costs beyond the premiums are capped at $5,950 through 2011.
For Gillian Sender, the new plan has been an enormous relief. Uninsured since December when she left her job in newspaper advertising sales, Sender, 52, started feeling fatigued and bloated over the summer. She went to a community health center near her home in Milwaukee to get it checked out in July and was referred to a gynecologic surgeon, who told her she had uterine cancer.
That same week, as she grappled with her diagnosis and panicked about how she would pay for her upcoming hysterectomy, chemotherapy and radiation, family members told her about the new options for people with preexisting conditions. Sender immediately signed up for a plan with a $3,500 deductible, for which she pays $288 monthly.
Although the plan's Aug. 1 start date meant she had to pay out-of-pocket for her July surgery, she's covered for the chemotherapy and radiation treatments. "I was more terrified of not having insurance than the diagnosis itself," says Sender. "It's definitely affordable, and the coverage is fabulous."
The plans vary significantly from state to state. States were given the option of running their own program or letting the federal government do so; 27 states opted to administer their own plans.
A recent report by researchers at the University of Kansas found that monthly premiums for a 50-year-old nonsmoker ranged from a few hundred dollars to more than $1,000 across the country. The comparable premium in the federally administered plans, which all have a deductible of $2,500, averages $455. Those plans are available in Virginia, where premiums range from $289 to $616, and the District, where premiums cost $304 to $649. In Maryland, which operates its own plan, premiums run from $141 to $328, with a $1,500 deductible.
Other key plan features that vary widely by state include deductible amounts, limits on out-of-pocket spending for care outside a plan's provider network, and coverage of medications and preventive services without first requiring people to meet the deductible, says Jean Hall, an associate research professor and co-author of the report.
The new plans can be tough to get into. In order to make sure the people with greatest need have first access -- if everybody migrated from the old high-risk pools at once, it could be prohibitively expensive -- the law lets people join the new, cheaper plans only if they've been uninsured for six months.
Connecticut Gov. M. Jodi Rell wrote to Secretary of Health and Human Services Kathleen Sebelius to recommend reasonable exceptions to the six-month rule, including permitting people who exhaust their so-called COBRA benefits after a layoff to sign up. However, since the six-month requirement is part of the statute, it would require a change in the law to adjust it, say experts.
There are other stumbling blocks. In most states, including the 23 whose PCIPs are run by the federal government, applicants have to document that an insurer has refused to cover them or their preexisting condition, or intends to do so. That puts people who aren't denied coverage outright in a tough spot.
Last year, Pat Kirkendall had surgery to remove a carcinoid tumor from her right lung. Her prognosis is good, and the slow-growing cancer may never reappear. She and her husband, who was laid off last year and now works for a startup, were covered under COBRA through July. But when Kirkendall, 64, applied for an individual plan this summer, she was quoted monthly rates from $411 to more than $900. The $411 plan had a $25,000 deductible.
Kirkendall, who lives in Centreville, would like to qualify for Virginia's new PCIP. But since she hasn't actually been turned down for coverage, she's locked out of the new program.
That probably wouldn't happen in Maryland or a handful of other states, where people may be eligible for the new plan if the coverage they've previously been offered would cost a designated amount more than the PCIP. In addition, 23 states – although not the plans run by the federal government – allow people to qualify who have a specific health condition such as cancer, diabetes or stroke.
Kirkendall says she'll probably go without insurance until she qualifies for Medicare next year. "I think I should have been included," she says. "I'm just betwixt and between."