After extending the pre-existing condition insurance plan (PCIP) one month at a time for the past four months, the administration is finally closing the doors on the federal risk pool, which was originally scheduled to close December 31st, 2013, at the end of April. After that, people who currently receive coverage through the program will have 60 days to enroll in guaranteed-issue individual plans, if they haven’t already. They will also have an opportunity to apply for premium tax credits and cost sharing subsidies.
The Pre-Existing Condition Insurance Plan went live three months after the Affordable Care Act was signed into law back in 2010 and was meant as a temporary safety net program for people with pre-existing medical conditions who did not have group health coverage and did not qualify for an individual policy.
New enrollments in the PCIP were halted on February 13th, 2013, but the program continued to cover those already enrolled. As originally intended, these individuals will now have an opportunity to enroll in individual market coverage with no medical underwriting.
The overall health of marketplace enrollees has received a lot of attention recently, with observers noting that the success of the program will depend on attracting young, healthy individuals who have relatively low medical expenses. Well, now a bunch of unhealthy individuals are about to flood the market.
Here’s an excerpt from the PCIP website when the suspension was originally announced:
“Based on program experience and trends since the start of the program, PCIP enrollees have serious and expensive illnesses with significant and immediate health care needs… This suspension will help ensure that funds are available through 2013 to continuously cover people currently enrolled in PCIP.”
So is this an opportunity for brokers? Possibly, yes. But, as also noted on the PCIP website, the program only covered about 100,000 people nationwide as of February last year, so there aren’t a ton of prospects, and many of them may have already signed up for coverage in the individual market. This number does not include individuals enrolled through state risk pools – as with the exchanges, some states chose to create their own pool while the majority of states deferred to the federal government.
The true opportunity for insurance agents is not in finding individuals who need health coverage one at a time but rather identifying groups of individuals who all need health coverage at the same time. And the best way to find them is by working with employers who are considering dropping their group coverage altogether. To learn more about a new analysis tool that can help employers with that decision, click here.