Pre-Existing Condition Insurance Plan

The Affordable Care Act created the Pre-Existing Condition Insurance Plan (PCIP) to make health insurance available to those that have been denied coverage by private insurance companies because of a pre-existing condition.

PCIP runs until 2014. In 2014, everyone will have access to affordable health insurance choices through a new competitive marketplace called an Exchange, which prohibits discrimination based on a pre-existing condition.

PCIP provides health coverage options for people who:

• Have been uninsured for at least six months
• Have a pre-existing condition or have been denied health coverage because of a health condition
• Are a U.S. citizen or are residing here legally

PCIP Program Basics:

• PCIP covers a broad range of health benefits, including primary and specialty care, hospital care, and prescription drugs.
• The program will not charge you a higher premium just because of your medical condition.
• PCIP does not base eligibility on income.

State Programs

Previously, many states have run “high-risk pools” or other programs that offer insurance to people with pre-existing conditions. Now, PCIP is available in every state, but the program may vary between states.

The Department of Health and Human Services (HHS), the Office of Personnel Management, and the Department of Agriculture’s National Finance Center, are running PCIP in some states. The federal government is contracting with a national insurance plan to administer benefits in those states. States have the option to build on their current programs, choose to run the new program, or elect to rely on HHS to provide coverage.

To learn more about PCIP, including eligibility, how to apply, and benefits, please visit www.HealthCare.gov or call 1-866-717-5826.

Funding for PCIP

The law appropriates $5 billion of federal funds to support PCIP, beginning on July 1, 2010 until January 1, 2014.

HHS proposed allocating funds for the program by using a formula almost identical to the formula used for the Children’s Health Insurance Program (CHIP). Specifically, funds are allotted to states using a combination of factors including nonelderly population, nonelderly uninsured, and geographic cost as a guide.

As under CHIP, HHS intends to reallocate allotments after a period of not more than two years, based on an assessment of state actual enrollment and expenditure experiences. This proposed reallocation aims to ensure that the capped amount of federal funding is allocated to states based on both the initial formula and performance.

Proposed Allocations by State

The table below presents the estimated state allotments over the four years based on the above methodology.

Potential Allocation of High-Risk Pool Funds Dollars in Millions*

* Preliminary: Final allotments may increase or decrease by +/- 1%.
Data sources: ACS State Population 2008; BLS Wage Data 2008.

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