HHS to Pay Agents to Boost Enrollment in Pre-existing Condition Insurance Program
By: Margarita Tapia
The U.S. Department of Health and Human Services (HHS) recently announced significant changes in the administration and pricing of its Pre-existing Condition Insurance Program (PCIP). As part of these changes, in states that participate in the federally run program, agents and brokers will soon be paid a fee for enrolling eligible consumers. This move, combined with a reduction in premiums in these same states and the loosening of criteria to qualify for the program that started this month, is intended to kick-start lagging participation in the PCIP.
The PCIP was created as part of the Patient Protection and Affordable Care Act (PPACA) in an effort to help consumers with pre-existing conditions gain better access to health insurance coverage. The program was designed to provide a bridge for these consumers until 2014 when guaranteed issue begins. The PCIP is administered at the state level in 27 states, while the other 23 states opted for the federal high risk pool.
Slightly more than 18,000 consumers currently receive coverage through the PCIP, which is drastically less than initial estimates. Many expected the $5 billion in funding through the PPACA to be quickly consumed. The Congressional Budget Office (CBO) estimated that as many as 200,000 people would sign up for coverage through these high risk pools. However the large participation in PCIP never materialized and HHS is now utilizing agents and brokers, among other changes to the program, in attempts to increase enrollment.
HHS announced several changes expected to impact consumers, agents and brokers. Premiums will be reduced anywhere between 2% and 40% depending on the state. Also, consumers will no longer have to wait for a rejection letter from their insurance company to qualify for PCIP coverage. To qualify, a consumer must (1) be a U.S. citizen, (2) be without health insurance coverage for six months or more and (3) obtain a letter from their doctor dated anytime within the last 12 months indicating that they have a pre-existing condition. However, all of these changes will only affect the 23 states that chose to participate in the federal risk pool. State-run pools are free to adopt these provisions if they so choose.
Similarly, only in states that participate in the federal program, licensed agents and brokers will be paid a flat fee of $100 for each eligible consumer they enroll. This portion of the program is scheduled to be up and running by Oct. 1, 2011 at the latest. It is important to note that many states running their own high-risk pools already pay agents and brokers a fee, averaging about $85 per enrollee. In fact, one of the reasons HHS moved to involve agents and brokers in the PCIP is because of the relative success these states have had in enrollment levels.
The broader implications of these moves by HHS, particularly the move toward further producer involvement, are yet to be determined. However, the Big “I” believes that this acknowledgement of the value of agents and brokers seems to be a positive step forward, despite the limited and temporary nature of the program (since high risk pools will no longer exist after guaranteed issue begins in 2014).
Margarita Tapia (margarita.tapia@iiaba.net) is Big “I” director of public affairs.
HHS Issues Final Regulations on Rate Increases
The HHS recently unveiled clear rules intended to provide greater scrutiny of health insurance rate increases that will be used to apply pressure on insurers to reduce profits.
The HHS recently released final regulations to allow states or the federal government to force insurers to justify any health insurance rate increase of 10% or more in the individual or small group markets. These regulations, which take effect Sept. 1, 2011, were promulgated as part of the PPACA.
Beginning in September 2012, states will be given the power to determine their own rate threshold(s) to trigger a review, which could be higher or lower than 10%. However, the regulations do not grant states or the federal government the power to reject rate increases. Once the information justifying the rate increase is gathered from an insurer, HHS and/or state governments are to post all relevant documents on their respective websites. Combined with this effort, HHS disbursed $44 million in PPACA grants to states in order to increase their “oversight capabilities.” The department is expected to distribute an additional $200 million as implementation of the program unfolds.
The stated intention of the rate review regulations is to increase transparency for consumers and provide additional information to the public regarding the reasons for a larger rate increase. However, HHS also made it clear that it believes insurer profits are too high and that this will be a tool to apply pressure on insurers to reduce those profits. An HHS press release said, “Publication of the final rule comes as health insurance companies have reported some of their highest profits in years. One cause for these profits is that actual medical costs are growing more slowly than what insurance companies projected when they set their 2011 rates last year. However, many of the rates consumers and small employers pay today don’t reflect these lower costs.”
—M.T.
The PCIP was created as part of the Patient Protection and Affordable Care Act (PPACA) in an effort to help consumers with pre-existing conditions gain better access to health insurance coverage. The program was designed to provide a bridge for these consumers until 2014 when guaranteed issue begins. The PCIP is administered at the state level in 27 states, while the other 23 states opted for the federal high risk pool.
Slightly more than 18,000 consumers currently receive coverage through the PCIP, which is drastically less than initial estimates. Many expected the $5 billion in funding through the PPACA to be quickly consumed. The Congressional Budget Office (CBO) estimated that as many as 200,000 people would sign up for coverage through these high risk pools. However the large participation in PCIP never materialized and HHS is now utilizing agents and brokers, among other changes to the program, in attempts to increase enrollment.
HHS announced several changes expected to impact consumers, agents and brokers. Premiums will be reduced anywhere between 2% and 40% depending on the state. Also, consumers will no longer have to wait for a rejection letter from their insurance company to qualify for PCIP coverage. To qualify, a consumer must (1) be a U.S. citizen, (2) be without health insurance coverage for six months or more and (3) obtain a letter from their doctor dated anytime within the last 12 months indicating that they have a pre-existing condition. However, all of these changes will only affect the 23 states that chose to participate in the federal risk pool. State-run pools are free to adopt these provisions if they so choose.
Similarly, only in states that participate in the federal program, licensed agents and brokers will be paid a flat fee of $100 for each eligible consumer they enroll. This portion of the program is scheduled to be up and running by Oct. 1, 2011 at the latest. It is important to note that many states running their own high-risk pools already pay agents and brokers a fee, averaging about $85 per enrollee. In fact, one of the reasons HHS moved to involve agents and brokers in the PCIP is because of the relative success these states have had in enrollment levels.
The broader implications of these moves by HHS, particularly the move toward further producer involvement, are yet to be determined. However, the Big “I” believes that this acknowledgement of the value of agents and brokers seems to be a positive step forward, despite the limited and temporary nature of the program (since high risk pools will no longer exist after guaranteed issue begins in 2014).
Margarita Tapia (margarita.tapia@iiaba.net) is Big “I” director of public affairs.
HHS Issues Final Regulations on Rate Increases
The HHS recently unveiled clear rules intended to provide greater scrutiny of health insurance rate increases that will be used to apply pressure on insurers to reduce profits.
The HHS recently released final regulations to allow states or the federal government to force insurers to justify any health insurance rate increase of 10% or more in the individual or small group markets. These regulations, which take effect Sept. 1, 2011, were promulgated as part of the PPACA.
Beginning in September 2012, states will be given the power to determine their own rate threshold(s) to trigger a review, which could be higher or lower than 10%. However, the regulations do not grant states or the federal government the power to reject rate increases. Once the information justifying the rate increase is gathered from an insurer, HHS and/or state governments are to post all relevant documents on their respective websites. Combined with this effort, HHS disbursed $44 million in PPACA grants to states in order to increase their “oversight capabilities.” The department is expected to distribute an additional $200 million as implementation of the program unfolds.
The stated intention of the rate review regulations is to increase transparency for consumers and provide additional information to the public regarding the reasons for a larger rate increase. However, HHS also made it clear that it believes insurer profits are too high and that this will be a tool to apply pressure on insurers to reduce those profits. An HHS press release said, “Publication of the final rule comes as health insurance companies have reported some of their highest profits in years. One cause for these profits is that actual medical costs are growing more slowly than what insurance companies projected when they set their 2011 rates last year. However, many of the rates consumers and small employers pay today don’t reflect these lower costs.”
—M.T.
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