By Jane Norman, CQ HealthBeat Associate Editor
October 3, 2012 -- Enrollment in the Pre-Existing Condition Insurance Plan hit 82,000 as of July 31, an all-time high for a program that had a slow start following its creation in the health care law.
But it's still far from the 375,000 Americans who were expected to rush to sign up, based on early estimates by actuaries with the Centers for Medicare and Medicaid Services. One problem for the program has been that the plan premiums, while at market rates, are costly for people with moderate incomes.
Per member per month costs also have been greater than anticipated, according to a recent Commonwealth Fund report.
The temporary program administered by states and the federal government is designed to be a stopgap for people with medical conditions who can't get insurance elsewhere. It will go out of existence once the health care law (PL 111-148, PL 111-152) goes into full effect in 2014 because insurers will be barred from charging more or denying coverage to people on the basis of pre-existing medical conditions.
According to the Department of Health and Human Services, 23 states and the District of Columbia have their pre-existing condition plans administered by the federal government, while 27 states run their own programs. California has the largest enrollment by far, with more than 11,000 people signed up.
The $5 billion PCIP program failed early on to attract as much interest as the Obama administration expected. In response, HHS cut premiums in May 2011, paid insurance agents to recruit uninsured people and eased enrollment requirements. Through the end of March 2011, only about 18,000 people signed up.
But earlier this year, HHS suspended the bonus program for insurance agents, saying there had been increases in awareness and enrollment.
The Commonwealth Fund report published earlier this month said the program has served its purpose.
"Despite the lower-than-anticipated enrollment and higher-than-anticipated costs, PCIPs appear to be performing their intended role as a bridge program, reducing costs of catastrophic medical liabilities for individuals and providers and improving access to care, including preventive and life-sustaining services," said the report by Jean P. Hall and Janice M. Moore of the University of Kansas. "PCIP enrollment continues to grow steadily; however, because premiums are priced at the regular rates for non-group coverage, enrollment is likely limited to people with relatively higher incomes."
