Monday, November 08, 2010

PCIP Rate Reduction

The folks in Washington, the ones who gave us Obamacare, have figured out a way to spur growth in the pre-existing health insurance program (PCIP). When PCIP was created they estimated 4 million citizens would qualify for the plan but expected 200,000 would eventually enroll.

To date, only 8,000 have actually signed up with 1,657 coming from Pennsylvania (161 in Georgia).

Why Pennsylvania?

The Keystone state charges a $283 monthly premium — one of the lowest rates in the country. Pennsylvania is also the only state to charge the same rate regardless of age. Other states have higher rates for older people.


Charge lower rates and the same rate regardless of age.

This must be part of the group that thought up Cash for Clunkers where you could trade in your $500 car for $4500.

So now the Wall Street Journal reports that HHS wants to encourage expansion of the failed PCIP idea by lowering premiums.

The federal government said Friday it will cut insurance premiums by nearly 20% for people in high-risk pools, a program under the health overhaul that insures those with pre-existing health conditions.

So what about folks that already bought? Will they get a retro-active rate adjustment?

If a 20% fire sale doesn't get the influx, how low will they go? Don't they realize the folks who wanted this plan expected it to be free?

But wait, there's more!

The Department of Health and Human Services said it will offer three types of plans beginning in 2011, instead of just one offered now. The existing standard plan will offer premiums almost 20% lower than this year's plan, according to the department, with a $2,000 medical deductible and a $500 drug deductible.

The agency will add a second plan with higher premiums and lower deductibles of $1,000 for medical and $250 for prescriptions. A third plan will include a tax-advantaged health savings account and carry a $2,500 deductible.

HHS also carved out a new category of premiums for children with pre-existing conditions. 

New plans, lower rates, child only plans.

What a country.

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