The managers of the Pre-existing Condition Insurance Plan (PCIP) program — a government health insurance program for people with serious health problems — are cutting benefits for the enrollees as well as suspending the processing of new applications.
Richard Popper, director of the insurance programs group at the Centers for Medicare & Medicaid Services (CMS), talked about the changes at PCIP in a memo posted on a Pennsylvania state government server.
The federal government is running the PCIP program in 23 states and the District of Columbia. State governments are running PCIP programs for their own residents in 27 states.
The Associated Press reported earlier that CMS itself has already suspended enrolling new applicants in the federal PCIP program states.
Popper wrote in the memo on the Pennsylvania server that the federal managers also have changed the PCIP plan design.
To cope with financial constraints, CMS wants the states with state-run PCIP programs to end their own application processing efforts quickly and to think about cutting PCIP plan benefits to match the reduced federal PCIP plan benefits, Popper said.
Federal PCIP program enrollees have to meet a $2,000 in-network deductible before a program plan pays for medical services. Once the plan starts paying for care, the enrollee must pay a coinsurance rate, or percentage of the bills, until the enrollee reaches the plan's annual out-of-pocket spending limit.
The old coinsurance rate was 20 percent, and the out-of-pocket maximum was $4,000 for in-network care and $7,000 for out-of-network care.
Now, Popper said, the coinsurance rate has increased to 30 percent, and the out-of-pocket maximum has increased to $6,250 for in-network services and $10,000 for out-of-network services.
In the past, CMS has let states use cost-sharing arrangements that were more generous than the federal arrangements, Popper said.
CMS wants states to reject any PCIP enrollment applications received after March 2.
