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PPACA Pre-Existing Condition Insurance Plan (PCIP) New Guidelines


Who:  Uninsured individuals who are U.S. citizens or residing in the U.S. legally, have been without health coverage for six months.

The new guidelines directly affect 23 States and the District of Columbia where the PCIP program is Federally-administered.  For uninsured individuals, who live in the other 27 states running their own programs, HHS sent notices to each state informing them of the opportunity to modify their current PCIP premiums.

When:  Starting July 1, 2011, PCIP premiums will be reduced and uninsurable individuals no longer have to wait on an insurance company to send them a denial letter. They can applying to the PCIP with a letter from a doctor, physician assistant, or nurse practitioner dated within the past 12 months stating that they have or, at any time in the past, had a medical condition, disability, or illness. This option became available to children under age 19 in February 2011.

Commissions:  Beginning fall 2011, HHS will begin paying agents and brokers for successfully connecting eligible people with the PCIP program.  The amount of commission has not been determined.

Executive Summary: Effective July 1, 2011, premiums under the federally administered Pre-Existing Condition Insurance Plan (PCIP) will drop as much as 40 percent in 17 states and the District of Columbia.  The decreases help bring PCIP premiums closer to the rates in each state’s individual insurance market. In the six states where PCIP premiums were already well-aligned with state premiums, premiums will remain the same (see chart below).


Average Rate Reductions Effective July 1, 2011 for Federally Administered PCIPs


Premium Reduction


Premium Reduction


Premium Reduction





North Dakota

No Change





South Carolina








District of Columbia



No Change








No Change








No Change



West Virginia



No Change




No Change


Eligibility standards will be eased in all 23 states and the District of Columbia where PCIP is federally-administered. That is, individual with a pre-existing condition can submit a letter from a medical provider certifying their condition.  They will no longer have to wait for a denial of coverage from an insurance company.  


Plans:  PCIP provides comprehensive health coverage to individuals otherwise uninsurable.  Available plans include:

2011 Standard Plan - has two separate deductibles -- a $2,000 medical deductible and $500 drug deductible, while also offering premiums that are almost 20% lower than the 2010 premiums. 


2011 Extended Plan - has a $1,000 medical deductible and $250 drug deductible plan.  The premiums for the 2011 Extended Plan will be slightly higher than 2010 premium levels. 


Health Savings Account Option - has a $2,500 deductible but with premiums that are 16% less than 2010 premiums.  This option is eligible to receive favorable tax treatment when used with a Health Savings Account (HSA). 


Child-Only Rate - To ensure that children have more affordable access to coverage, HHS has established premiums targeted for covering children under PCIP, creating a child-only rate for PCIP enrollees between 0-18 years of age. 


For more information, including eligibility, plan benefits and rates, as well as information on how to apply, visit


Action Required:  The new guidelines is intended to ensure that otherwise uninsurable individuals with pre-existing conditions have easier access to insurance coverage.  Brokers and agents with such prospects should know about PCIP plan options.  Employers who do not currently provide insurance or who have employees who cannot qualify for group coverage due to pre-existing conditions may want to discuss PCIP’s with a local agent, broker, or benefit consultant as an option for their employees.


The information presented and contained within this article was submitted by Ronald E. Bachman, President and CEO of Healthcare Visions, Inc. This information is general information only, and does not, and is not intended to constitute legal advice. You should consult your legal advisors to determine the laws and regulations impacting your business.