The Pre-Existing Condition Plan (PCIP) — which allowed those with pre-existing health conditions the ability to obtain insurance if they had been denied coverage — has cut benefits for enrollees and suspended the processing of new applicants in 23 states effective immediately.   

The reason for the enrollment shutdown, according to the U.S. Department of Health and Human Services, was to safeguard the remaining funds that support those who are currently enrolled in the PCIP through the current year, until the PPACA goes into effect next January.

The PCIP At-A-Glance

The plan, originally created as a stopgap until the PPACA takes full effect in January 2014, has enrolled close to 135,000 people to date, which is a far cry from the projected 400,000. The overall low enrollment can in part be attributed to the fact that while most people were not denied coverage, they still found it challenging to afford the premiums, which ranged anywhere from $200 to $600 or more per month.

However despite the lower than anticipated enrollment, the costs turned out to be far beyond that which was originally projected. According to federal officials, the PCIP program exhausted close to $2.4 billion of the designated $5 billion in funding on medical claims, and another $180 million on administrative cost, creating an immediate nationwide suspension of enrollment.

What’s Next on the PPACA Horizon?

In the 23 states the federal government administers, people who are currently enrolled in the PCIP program will be allowed to keep their coverage, and enrollees who move to new states will still be considered eligible to apply for replacement coverage.

Once 2014 arrives, the PPACA should offer relief by giving all Americans access to affordable health care, regardless of health status. For more information about the PCIP in your state as well as a list of states served by the federally-run PCIP, visit https://www.pcip.gov/PCIP_States.html.

If you haven’t outsourced your COBRA administration yet, now is the time to explore your options. With the added challenge of PPACA compliance, most HR teams welcome the relief of outsourcing COBRA administration. To further explore the option, download our free report – “In Search of ROO (Return on Outsourcing).”