By John Reichard, CQ HealthBeat Editor
July 1, 2010 -- Americans who have been uninsured for at least six months and have been unable to obtain private health coverage because of a pre-existing health condition can now apply for benefits through a new program created by the health care overhaul law, the department of Health and Human Services announced Thursday.
Twenty-one states opted to have the federal government run the "Pre-Existing Condition Insurance Plan" for them on a state basis rather than running it themselves, Richard Popper, deputy director of the Office of Insurance Information and Oversight at HHS, noted in a press briefing Wednesday. The program will differ from state to state even though it is under federal control, Popper said.
People in the 21 states can now apply for coverage and can obtain the application to do so at the new insurance consumer website that launched Thursday. Their coverage "will start August 1st, 2010, if we receive their application by July 15th," Popper said.
Application details and coverage dates will vary in the other 29 states and the District of Columbia, which chose to run their own programs drawing on the total of $5 billion in federal funding to be made available for the entire national effort. "However, a majority of the states will begin providing applications and enrollment starting in July as well," he said. Their information also will be available on the website. Coverage will be available in all states by the end of summer.
Premiums for the coverage will vary from $140 to $900 per month, said Popper. Premiums will differ according to age. Benefits will vary among the states running their own plans, he said. And while the benefit structure will be the same in the states in which the federal government is in charge, "the premiums differ by state," he said.
The program is modeled after the Children's Health Insurance Program in that states have flexibility to tinker with premiums and benefits to meet the needs of their own marketplaces, Popper said.
Many analysts predict the $5 billion will run out well before the program ends in December 2012. But Popper said that the HHS secretary has the power "after a year or two" to shift allocations from states with low take-up rates to states with strong demand. "Along with that we can work with the states to adjust their benefit structure, the deductibles, the co-pays, the overall plan structure" to "help the plan make it to 2014 when it will no longer be needed," Popper said.
Popper also suggested that take-up rates may be lower than some people think because a significant number of people who are uninsured because of pre-existing conditions have low incomes and won't be able to afford the premiums. Popper and Jay Angoff, the director of the Office of Insurance Information and Oversight, repeatedly emphasized that the program is a temporary one and that in 2014 everyone will be able to get coverage that does not vary premiums based on their health status.
Republican Sen. Michael B. Enzi of Wyoming, however, says the program is vastly underfunded, citing an estimate by the Congressional Budget Office that an additional $5 billion to $10 billion in funding is required to meet the likely demand if enrollment is not limited.
"The number of people who may be eligible for the program is in the millions—much greater than the estimates of participation—but CBO focused its analysis on those people who would be likely to enroll and has not estimated the total size of the eligible population," CBO Director Douglas Elmendorf said in estimating the cost.
The HHS officials resisted talk of enrollment caps. But only 200,000 Americans will be covered at any one time, said Popper, using the same enrollment estimate as that of CBO. But because some people will leave the program he estimated that some 350,000 people will benefit overall.
The states that decided to let HHS run their plan are: Alabama, Arizona, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia and Wyoming.