The Voice is the email newsletter of The Special Needs Alliance. This installment was written by Sarasota, Florida attorney Mary Alice Jackson, Esq., a member of the Special Needs Alliance and active participant on its Public Policy Committee. She is a partner at Boyer & Jackson, P.A., where her practice includes special needs and long term care planning, estate planning, probate and end-of-life issues. Mary Alice is also an active member of the National Academy of Elder Law Attorneys, a past Chair of the Florida Bar Elder Law Section, and an adjunct professor in the Stetson University College of Law Elder LL.M. program.
The 2010 health care reform law, now referred to as the “ACA” (Affordable Care Act), is much like a jigsaw puzzle. To create comprehensive reform, a number of pieces must be in place. One of the most important pieces prohibits private insurance companies from denying coverage to individuals based upon the fact that they have a pre-existing condition. Until the ACA, most persons covered under a group health insurance plan could be covered even when a pre-existing condition was present. However, individuals with pre-existing conditions but lacking group coverage found health insurance to be either unavailable or prohibitively expensive. Therefore, a critical component of the ACA is that, beginning in 2014, insurers will no longer be able to deny coverage to any individual on the basis that he or she has a pre-existing condition.
While this is an encouraging development, proponents of health care reform understood that tens of thousands of Americans with pre-existing conditions would remain uncovered until 2014. Individuals who are already ill would continue to go without coverage and without treatment, become more seriously ill and as a result would need care in a more expensive environment such as a hospital or emergency room. Some would die without necessary medical attention. To avoid the human tragedy and economic loss that results from non-coverage, the ACA included a provision known as “Pre-Existing Coverage Insurance Plans,” or “PCIPs.”
In November, 2010, the Centers for Disease Control reported that more adults between the ages of 18 and 64 went without health care between 2008 and 2010 than ever before. (See http://www.cdc.gov/vitalsigns/healthcareAccess/LatestFindings.html for this and most of the following data.) Between January and March, 2010, as many as 30 million Americans had been uninsured for more than 12 months. Of the more than 46 million adults in the 18-64 age group, 30% have a disability. The 30% with a disability had gone for more than 12 months without health care. Persons with disabilities were shown to be about twice as likely to skip or delay medical care.
The elimination of pre-existing condition exclusions was a key element of the ACA and provides new planning opportunities for persons with disabilities. The federal government set aside five billion dollars in funding for the program until the 2014 plans come into existence. The programs are completely federally funded and states are not required to participate financially. Twenty-three states and the District of Columbia have chosen to have the federal government administer the program; the remaining states are self-administering the PCIPs under their own rules within the parameters of the ACA.
A PCIP is an insurance plan that does not exclude persons with pre-existing conditions and that has affordable premiums in comparison to the individual plans currently on the market. The ACA defines a pre-existing condition as a condition, disability or illness (physical or mental) which you have before enrolling in a health plan. To qualify to participate in a PCIP, an applicant must (1) be a U.S. Citizen or in the country legally; (2) have a pre-existing condition; and (3) have been without insurance coverage of any kind (including but not limited to Medicaid or COBRA coverage) for at least the preceding six months. Documentation regarding the lack of insurance is required in most states, and may include either a denial by an insurance company, a letter from your doctor, or both. There is no age limitation for applicants to the PCIP coverage.
A PCIP is not a free pool or plan. Premiums vary by state, and, within the states, by age and plan chosen. A visit to www.healthcare.gov or https://www.cms.gov/CCIIO/Programs-and-Initiatives/Insurance-Programs/Pre-Existing-Condition-Insurance-Plan will lead you to a map of states and updated information about rates and plans. As an example, the Texas PCIP is federally administered and has premiums varying from $261 to $749 per month. In addition, there are deductibles ranging from $1,000 to $3,000 depending upon the plan chosen. Co-payments also apply; however, the total amount paid out by an individual cannot be higher than $5,950 annually. This is a requirement of the ACA.
The Special Needs Alliance works with individuals who have been determined to be disabled either by the Social Security Administration or through a state’s disability determination process. We are keenly aware that many people do not want to make a disability application, have not recognized that a disability is present, or have a condition which, while not currently disabling, is likely to become so. It is very important to recognize that approval to be insured under a PCIP does not require that the pre-existing condition be disabling. This fact can be very important in situations where caregivers for persons with disabilities have pre-existing conditions and are without medical insurance but have chronic illnesses which might be related to or affect their ability to provide care.
The PCIP program initially began with a single option plan; however, experience rapidly showed that this single option was insufficient. The Secretary of HHS has now announced that beginning in 2011, three plan options will be available in federally administered programs. The first is the “standard” plan, with two separate deductibles – a $2,000 deductible for medical expenses and a $500 deductible for prescription drugs. Premiums are lower than they were in 2010.
The second program is the “extended” plan and has a $1,000 medical deductible and a $250 drug deductible. The premiums for this plan will be slightly higher than the 2010 single plan premiums. Finally, there is a “health savings account” option that has a $2,500 deductible but with premiums that are 16% less than the 2010 plan. Persons choosing this option will have the tax advantages that apply to any individual who is accessing an HSA.
For persons with disabilities who cannot otherwise qualify for Medicaid assistance, the PCIPs offer relief until the total prohibition against exclusion of pre-existing conditions in health insurance coverage comes into effect in 2014. At that time, the PCIPs will cease to exist and all citizens will be able to choose from individual, group and state health exchange policies without concern for their existing health status.
Success of the PCIP program has been difficult to assess. In the first months that the program was available, enrollment was scarce. However, between late 2010 and March of 2011, enrollment has doubled from 12,000 to 24,000 people. Those observing the program’s growth cite an initial lack of education about the availability of PCIP coverage as the reason for the gradual acceptance of the program’s benefits. However, many also recognize that, while PCIP coverage can be a literal lifesaver for many people, it remains economically unfeasible for others. Premiums and deductibles remain out of reach for many people, especially in today’s economy. Currently insured individuals (including but not limited to those with Medicaid or COBRA coverage) who might consider shifting to a PCIP plan will often find it too financially risky to go without any insurance for the six months required before they can qualify for PCIP coverage.
Nonetheless, for the disability community, we know that coverage is now available to persons of all ages who have been uninsured for at least six months, and that coverage is comprehensive, providing preventive care, acute care and prescription medication benefits. In most states, applications can be made online. Further information is available at https://www.cms.gov/CCIIO/Programs-and-Initiatives/Insurance-Programs/Pre-Existing-Condition-Insurance-Plan or 1-866-717-5826.
About this Newsletter: We hope you find this newsletter useful and informative, but it is not the same as legal counsel. A free newsletter is ultimately worth everything it costs you; you rely on it at your own risk. Good legal advice includes a review of all of the facts of your situation, including many that may at first blush seem to you not to matter. The plan it generates is sensitive to your goals and wishes while taking into account a whole panoply of laws, rules and practices, many not published. That is what The Special Needs Alliance is all about. Contact information for a member in your state may be obtained by calling toll-free (877) 572-8472, or by visiting the Special Needs Alliance online.