The Patient Protection and Affordable Care Act (PPACA, P.L. Temporary Federal High Risk Pool Program

The temporary HRP program, or the Pre-Existing Condition Insurance Plan (PCIP ) as it is commonly referred to, is intended to provide transitional coverage for uninsured individuals with preexisting conditions until January 1, 2014, when group health plans and health insurance issuers of group or individual health insurance coverage will be prohibited from having preexisting condition exclusions. A PCIP can be administered either by a state or by the U.S. Department of Health and Human Services (HHS). As illustrated in Figure 1 , slightly more than half of the states (27) have accepted responsibility for administering their own PCIP plan, while 23 states and the District of Columbia (DC) requested that HHS run the program on their behalf. Within OCIIO, the Office of Insurance Programs (OIP) was established to be responsible for administering the temporary high risk pool program and associated funding to states. PPACA appropriated $5 billion to pay claims and the administrative costs of the temporary HRP that are in excess of the amount of premiums collected from enrollees beginning on July 1 2010, until the program ends on January 1, 2014. Eligibility Criteria

The PCIP program is intended to supplement existing state HRPs. To be a qualified PCIP, the health insurance coverage must have an actuarial value of at least 65% of the total allowed costs. This means the total annual cost-sharing requirements, including deductibles, cannot exceed $5,950. By law, premium rates for the PCIP must be established at a standard rate for a standard population and age rating cannot exceed a factor of 4 to 1. PCIP Program Tables
This report briefly describes the temporary federal high risk pool (HRP) program, more commonly known as the Pre-Existing Condition Insurance Plan (PCIP) program. The PCIP program was established by the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148, as amended). Under PPACA, the PCIP program is intended to help individuals with preexisting conditions who have been uninsured for six or more months to obtain health insurance coverage before 2014. In 2014, coverage will be available on a guaranteed issue basis and preexisting condition exclusions will be prohibited.
To be a qualified PCIP, the insurance coverage must have an actuarial value (the average percentage of expenses that the plan covers) at least equal to 65% of total allowed costs, and out-of-pocket costs cannot exceed $5,950 for an individual in 2011. The premiums must be established at a standard rate for a standard population, and age rating cannot exceed a factor of 4 to 1. Claims and administrative costs will be subsidized by the federal government.
States can run the program or elect to have the Department of Health and Human Services (HHS) operate the program in their states. Slightly more than half of states (27 states) contracted to operate their own PCIPs. HHS administers the PCIPs in 23 states and the District of Columbia. PPACA appropriates $5 billion of federal funds to support the program, available from July 1, 2010, until the program ends on January 1, 2014. Originally projected to have 200,000 or more enrollees, the PCIPs had 21,454 enrollees as of April 30, 2011. This is a 168.65% increase from the first enrollment statistics released on November 1, 2010.
This report provides an overview of the temporary federal high risk pool program and will be periodically updated to reflect any legislative or regulatory changes.