On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act, a sweeping piece of legislation which had dramatic implications for healthcare, including payors, patients and providers. On June 28, 2012, the Supreme Court of the United States upheld virtually all provisions of the legislation. From a practical viewpoint, one aspect of the legislation is intended to solve for a vexing problem: how to provide coverage for an estimated 13 million individuals with pre-existing conditions. Routinely, commercial insurers deny coverage to these individuals, citing them as excessively high risk. In many states, "insurers of last resort" would provide coverage, but the coverage would include a waiting period (e.g., one year) with respect to the pre-existing condition and/or charge an unaffordably high premium.
To address this problem, the Act requires all Americans to purchase health insurance (thereby spreading out the risk) and calls for the creation of "health benefit exchanges." These exchanges are scheduled to come into existence on January 1, 2014, and will allow individuals to obtain coverage regardless of the existence of a pre-existing condition.
Because the exchange won't go into effect until January 2014, the Act created the Pre-Existing Condition Insurance Plan, a health plan for individuals with pre-existing conditions that is run by either the state or federal government. The PCIP allows patients with pre-existing conditions to obtain coverage now and provides tremendous benefits for providers, by converting self-pay patients (i.e., those with bad debt and charity care) into paying patients. The patients gains coverage, and everybody wins.
Therefore, hospitals should modify their financial counseling processes to determine (1) if the patient has a pre-existing condition, and (2) if the patient has been without insurance for at least six months. If the patient responds affirmatively to both questions, the patient should be referred to the PCIP program's website, www.pcip.gov. In addition, financial coordinators in high-cost programs, such as transplant programs, should be familiar with the program as well to guide patients to this coverage.
Individuals meeting these criteria must apply for coverage. In each state, the elements of the application differ slightly. For example, In Florida, a letter of denial is required. More often than not, the individual does not have such a letter. As an alternative, a certification letter from a licensed health insurance broker is accepted.
PCIP is a very beneficial program that the federal government has not actively promoted: as of December 31, 2011, only 48,000 individuals were enrolled in the entire country. When properly approached, everyone can benefit significantly — the patient and the provider.
Peter F. Gallagher, CPA, FHFMA, is a member of the Virginia Chapter of HFMA. He has served as chapter president, served on the National Board of Examiners and is a Medal of Honor recipient. Most recently, he served for eleven years as CFO for Bon Secours Virginia, a seven hospital system with revenue of $1.9 billion. Currently, he is president of Manakin Associates, LLC, a healthcare consulting firm specializing in helping hospitals identify and enroll patients in the PCIP. He can be reached at pfgallagher@manakinassociates.com.
M. George Clark, LUTCF, CEP, is a registered insurance broker specializing in health insurance, life insurance, disability insurance, dental, NCAA student accident and other ancillary lines for both employers and individuals. He currently insures over 6,000 clients throughout the United States.His professional designations include Life Underwriting Training Council Fellow and Certified Estate Planner. He is a multi-year Million Dollar Round Table Member (only the top 1 percent in the Industry qualify). He can be reached at mgclark@manakinassociates.com.
To address this problem, the Act requires all Americans to purchase health insurance (thereby spreading out the risk) and calls for the creation of "health benefit exchanges." These exchanges are scheduled to come into existence on January 1, 2014, and will allow individuals to obtain coverage regardless of the existence of a pre-existing condition.
Because the exchange won't go into effect until January 2014, the Act created the Pre-Existing Condition Insurance Plan, a health plan for individuals with pre-existing conditions that is run by either the state or federal government. The PCIP allows patients with pre-existing conditions to obtain coverage now and provides tremendous benefits for providers, by converting self-pay patients (i.e., those with bad debt and charity care) into paying patients. The patients gains coverage, and everybody wins.
Therefore, hospitals should modify their financial counseling processes to determine (1) if the patient has a pre-existing condition, and (2) if the patient has been without insurance for at least six months. If the patient responds affirmatively to both questions, the patient should be referred to the PCIP program's website, www.pcip.gov. In addition, financial coordinators in high-cost programs, such as transplant programs, should be familiar with the program as well to guide patients to this coverage.
Eligibility
The requirements to qualify for PCIP are simple:- You must be a citizen or national of the United States or reside in the U.S. legally.
- You must have been without health coverage for at least the last six months. If you currently have health insurance coverage that doesn't cover your medical condition or are enrolled in a state high risk pool, you are not eligible for PCIP.
- You must have a pre-existing condition or have been denied coverage because of your health insurance coverage.
Individuals meeting these criteria must apply for coverage. In each state, the elements of the application differ slightly. For example, In Florida, a letter of denial is required. More often than not, the individual does not have such a letter. As an alternative, a certification letter from a licensed health insurance broker is accepted.
Application process
The application process can have some challenges, although not insurmountable. It must be remembered that this is the sale of health insurance — typically, the patient needs assistance in completion of the application. Also, since the benefits of PCIP are so extensive, the assistance of an insurance professional is very helpful in explaining the details. Finally, the individual needs to understand the financial aspects of PCIP — the monthly premiums, the out-of-pocket responsibility, etc.PCIP is a very beneficial program that the federal government has not actively promoted: as of December 31, 2011, only 48,000 individuals were enrolled in the entire country. When properly approached, everyone can benefit significantly — the patient and the provider.
Benefits for the individual
The benefits for the individual are generous. Coverage includes inpatient, outpatient and emergency services, as well as prescription drug coverage, home health and hospice services. The premium is affordable — in Texas for example, premiums for the standard plan range from $118/month to $376/month based upon age. Annual out-of-pocket maximums are affordable as well.Benefits for the provider
The provider benefits from the existence of this new payment source. Many providers generously see patients with pre-existing conditions, as they are sensitive to the individual's needs. Now, with PCIP, the providers can be paid for their services. And payment is typically generous, as the government in most states has contracted with a rental-network PPO to provide a network and administer claims. Most providers have been pleasantly surprised at the level of payment they have received. One Mid-Atlantic hospital was paid over $700,000 (approximately 86 percent of charges) for one case! Also, if a hospital is involved, the coverage will also extend to staff physicians — a medical staff relations benefit.Peter F. Gallagher, CPA, FHFMA, is a member of the Virginia Chapter of HFMA. He has served as chapter president, served on the National Board of Examiners and is a Medal of Honor recipient. Most recently, he served for eleven years as CFO for Bon Secours Virginia, a seven hospital system with revenue of $1.9 billion. Currently, he is president of Manakin Associates, LLC, a healthcare consulting firm specializing in helping hospitals identify and enroll patients in the PCIP. He can be reached at pfgallagher@manakinassociates.com.
M. George Clark, LUTCF, CEP, is a registered insurance broker specializing in health insurance, life insurance, disability insurance, dental, NCAA student accident and other ancillary lines for both employers and individuals. He currently insures over 6,000 clients throughout the United States.His professional designations include Life Underwriting Training Council Fellow and Certified Estate Planner. He is a multi-year Million Dollar Round Table Member (only the top 1 percent in the Industry qualify). He can be reached at mgclark@manakinassociates.com.
More Articles on Pre-Existing Conditions:
GAO: As Many As 122M Adults Have Pre-Existing Conditions
Health Law Provides Coverage to 50K Patients With Pre-Existing Conditions